View: The government lawyers' Obamacare rescue strategy

Health insurance exchanges

A brief word on the details of the case: You may recall that it’s about the state-level health insurance exchanges that the PPACA set up and on which its ability to deliver insurance depends. The law authorized state governments to create the exchanges. The PPACA also contemplated the possibility that states would fail to create the exchanges, and authorized the federal government to establish exchanges on behalf of the states if they didn’t act.

The trouble arose with a single sentence of the PPACA, one connected to a crucial feature of the exchanges. Once they are created, the states receive subsidies in the form of tax rebates that go to their residents who buy insurance on the exchanges. In that context, the law refers to an “Exchange established by the State.”

The clever anti-PPACA lawyers hit upon these words. They argue that the subsidies are only available to exchanges that are literally established by the state. Consequently, they reason, when the federal government establishes the exchange on behalf of the state, the subsidies aren’t available. And if the subsidies aren’t available, Obamacare may collapse. The U.S. Court of Appeals for the D.C. Circuit agreed with the PPACA opponents in a 2-1 decision called Halbig v. Burwell.

What’s the argument on the other side? Here’s where things get really interesting. You would think that the best argument derives from common sense: Congress couldn’t possibly have drafted the PPACA in such a way that if states don’t create their own exchanges, the whole health-care plan fails. Indeed, there would be no reason at all to provide for the creation of a health-care exchange by the federal government if this absurd condition were to apply. For this reason, some observers have thought that the phrase “established by the State” should be considered a statutory “glitch” or drafting error. (Interestingly, that view has been shared by both some supporters of the law and some opponents.)

But that’s not the argument the Department of Justice has chosen to advance. Rather, the Justice lawyers insist on using the text of the statute to establish the counterargument. Their best textual argument refers to the creation of the exchanges by the federal government. In the relevant provision, the law says that the federal government shall “establish and operate such Exchange within the State.” The Department of Justice says that the words “such Exchange” (with the capital letter) proves that the federally created exchange is in fact a state exchange for purposes of the law. In addition, it argues that other provisions of the law as written would be rendered meaningless if “established by the State.”

This argument is probably correct, and it’s at least plausible. But on its own, it also leaves the possibility that a close textual reader might conclude not that the two texts work in harmony, but that they contradict each other. Once a contradiction is believed to exist, you’d think it would be a logical time to introduce purpose.

But the Justice lawyers won’t do it — because they think they can’t if they want to win. The stakes are high, and I’m sympathetic to the idea that zealous lawyering means making the argument most likely to win. But we should also keep in mind the long-term costs associated with conceding to the logic of textualism and its refusal to consider purpose. If the Department of Justice loses, the court’s opinion may well say that the case was all about the text and nothing but the text. By avoiding the logic of purpose, the Supreme Court might be able to turn the law upside down. And that, if it happens, will be a great argument against textualism.

See also: View: Republicans need viable Obamacare alternative now.