(Bloomberg View) — By the end of next month, the Supreme Court will have released its decision in King vs. Burwell (Case Number 14-114), the case that will determine whether subsidies will be available for insurance purchased through a federally operated exchange.
The plaintiffs say this is impermissible, because the law provides for subsidies only for policies purchased on exchanges “established by the state”, probably inserted in the law as an inducement to states to set up exchanges. The defenders of the status quo argue that this is insane, because they’d never structure the system so as to risk having needy people lose subsidies, and because no one who actually worked on the law remembers having any such intention.
Robert Pear airs both of the defender’s points for the New York Times, interviewing political folks who were there during the negotiations, and staffers who helped draft the legislative language. Naturally, given my continuing opposition to Obamacare, a number of Obamacare supporters have asked me what I thought of this, with veiled hints that I should find this totally devastating to the arguments in the King case. My actual reaction is as follows:
This is not new.
This is incomplete.
This is not legally relevant, for good reason.
If it were legally relevant, it would not be as helpful to the case as liberals think.
This is not the first time a media outlet has talked to folks who were involved in the process, and recorded them saying that they never, no way and no how, intended to deny subsidies to states—or reasoning, like Olympia Snowe in Pear’s article, that they couldn’t have set it up this way, because it would be crazy to choose a structure that threatened subsidies for people in states that didn’t set up exchanges.
These articles, however, often don’t provide important counterarguments. For example: Congress indisputably chose exactly that crazy, insane, totally inconceivable structure for the Medicaid expansion passed in the same law. In fact, it was considerably more coercive: if you didn’t expand, you lost all your Medicaid funding, not just the new stuff. Why would Congress choose a structure that might result in a net loss of insurance coverage? We can sit around and speculate, but ultimately the correct answer is “Who cares? They did.”
Or consider the “drafting error” interpretation that many politicians have offered. Here’s a puzzle about that, noted by Jonathan Adler and Michael Cannon in their amicus brief supporting the King plaintiffs: At several points during the drafting process, people kept adding the phrase “established by the state” to the middle of “exchange established under Section 1311,” which Cannon and Adler say was unnecessary unless they saw some distinction between exchanges established under Section 1311, and exchanges established by the state under that section. This language survived the process of merging and reconciling bills, even while other sections were amended to ensure parity of requirements on federal and state exchanges.
Pear does offer a possible explanation: As I read it, he’s saying that the drafters meant it initially, but they they realized that some states might not establish exchanges, so they set up a federal backstop, then forgot to change the relevant sections about subsidies. But legally, that’s not as helpful as people seem to think.
The government has not made this “drafting error” argument in either its brief or oral argument; instead the defendants argue that “exchange established by the state” is a term of art that includes exchanges not established by the state. There’s good reason for this. The “drafting error” argument requires admitting that at some point “established by the state” was deliberately written into law to mean, well, exchanges established by individual states, something that the government has no interest in saying, because contrary to apparently popular belief, “drafting error” is not a magic word that forces the Supreme Court to give you a mulligan. As Adler points out, Elena Kagan recently wrote in another case that, “This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that (in [the IRS’s] words) Congress ‘must have intended’ something broader.”