Supreme Court Upholds Federal Subsidies in Obamacare

In a decision that came out pretty much exactly as I expected, the Supreme Court yesterday upheld the distribution of tax subsidies in the federal health care exchanges created by the Affordable Care Act by a 6-3 vote. Chief Justice Roberts and Justice Kennedy joined the four liberals on the court and Roberts wrote the majority opinion.

The premise of the plaintiffs’ argument was ridiculous from the very start. The ACA said that federal subsidies were available to qualified applicants for health insurance in any “Exchange established by the State.” But some states refused to create their own health insurance exchanges, so residents of those states got insurance through the federal exchange. Plaintiffs argued that because of those five words, it was illegal to subsidize the purchase of insurance in the federal exchange because they were “established by the State” but by the federal government.

This case really was quite a simple one, despite the fevered protests from conservatives eager to find any way, no matter how absurd, to bring down Obamacare. It is a well-established matter of statutory interpretation that when the wording of a law is vague, you must interpret the words in a manner consistent with the purpose and intent of the law. Since the purpose and intent of the ACA was to make health insurance available and affordable to as many of the uninsured as possible, could Congress really have intended to exclude the federal exchange, which covers about 2/3 of the country, from such subsidies? Of course not. To interpret the text that way would be to say that Congress explicitly intended to destroy the effectiveness of the very law that text resides in.

And here’s the thing: No one thinks that Congress actually intended that, including the plaintiffs in this case and the conservative activists supporting this case. They can’t cite a single member of Congress who believed at the time the law was passed that the subsidies would not be available to every qualified applicant for insurance in the country. In fact, groups like the Heritage Foundation specifically acknowledged that this was the case at the time the law was passed. Everyone in Congress understood that to be what the law intended and said. Best of all, the very justices who dissented in this case said so in the first challenge to the ACA and Chief Justice Roberts actually quotes them in his opinion:

The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. One study predicts that premiums would increase by 47 percent and enrollment would decrease by 70 percent. Another study predicts that premiums would increase by 35 percent and enrollment would decrease by 69 percent. And those effects would not be limited to individuals who purchase insurance on the Exchanges. Because the Act requires insurers to treat the entire individual market as a single risk pool, premiums outside the Exchange would rise along with those inside the Exchange.

It is implausible that Congress meant the Act to operate in this manner. See National Federation of Independent

Business v. Sebelius, 567 U. S. ___, ___ (2012) (SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting) (slip op., at 60) (“Without the federal subsidies . . . the exchanges would not operate as Congress intended and may not

operate at all.”).

So the position being taken by the three justices in dissent — Scalia, Thomas and Alito — is that Congress must have intended to destroy the very law they just passed with that wording. That is, of course, patently ridiculous. Scalia, naturally, threw quite a tantrum about it in his dissent, ignoring his own inconsistency on the matter and raging against the majority. He even read his dissent from the bench, something justices typically only do when they feel really strongly about the wrongness of the decision. Apparently, Scalia was so upset that he missed out on a chance to take health care away from more than 6 million people that he decided that he must sound his barbaric yawp for all to hear.

You can read the full ruling here.

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  • Hoosier X

    I was going to say that Scalia is the biggest hypocrite the conservatives have ever had. But then I remembered every other conservative I’ve ever met or read about or heard about.

  • marcus

    Scalia did have run rather salient point in his tantrum: (paraphrased) If they were just going to find to that obvious (and rational) conclusion; then, why the hell did they take up the case?

  • marcus

    This Just In… From Daily Kos”

    The Supreme Court struck down marriage bans nationwide Friday in a 5-4 decision authored by Justice Anthony Kennedy, the fourth landmark ruling advancing LGBT rights he has written.

  • gshelley

    I appreciate that Scalia is intelligent, but how do conservatives take him seriously? He pretty blatantly shifts his reasoning and analysis to get whatever result he wants.

    His claim that this case was simple is astounding. Even if you ignore all the legislative history that shows the phrase entered because of the way the two versions were combined, and that at the time no one in the legislature thought it meant subsidies would only be available on state exchanges, and ignore the way it was understood over the next couple of years, where no one suggested this and everyone, both for and against acted as though the federal exchange subsidies were legal, you still have the multiple examples Roberts highlighted where the actual text of the law is assuming the subsidies are available.

  • Reginald Selkirk

    I appreciate that Scalia is intelligent, but how do conservatives take him seriously? He pretty blatantly shifts his reasoning and analysis to get whatever result he wants…

    Exactly. And what results does he want? Conservative results!

  • ArtK


    I appreciate that Scalia is intelligent, but how do conservatives take him seriously? He pretty blatantly shifts his reasoning and analysis to get whatever result he wants.

    That’s exactly why they like him. He gets results. If you thought that anything more than a tiny fraction of the people in the US (conservative or liberal) really understood the Constitution, you’d be wrong. Most people just want a result that they can live with and don’t care how that result is achieved.

    The results that people can live with? Most often, whatever the tribe wants, even if it hurts them individually. I’m sure that had SCOTUS decided the other way, there would have been Teabaggers cheering the decision even as they went looking for new insurance; and blaming Obama in the process.

  • Raging Bee

    This whole dispute was caused by a problem too few people are willing to talk about: insufficient staff support for Congresspersons and their committees. When the Republicans took over both houses of Congress in 1995, one of the first things they did was gut their own support staffs across the board; which left them with not enough competent staffers to help them gather credible information, sift through conflicting claims by lobbyists on all sides of all legislative issues, and write laws with proper attention to details like the one at issue here. One result of that purge of necessary expertise is that Congresspersons have to rely on outside sources — i.e., lobbyists — to write the laws for them; another is careless mistakes like this, which a knowledgeable editor should have caught back in, maybe, 2009; and which always have the potential to degrade or derail the intended effect of any piece of legislation.

    This is yet another result of the Republicans’ mindless policies of tax-cutting, budget-cutting, and total disregard for intellect and expertise, even when it’s deployed for their objectives.

  • ArtK

    Oh FFS. I just saw a link to an article in The Blaze (Wayne Root) asking “Was Supreme Court Justice John Roberts Blackmailed?” It goes on to say:

    Has Supreme Court Justice John Roberts been blackmailed or intimidated?

    I would put nothing by the Obama administration that lives and rules by the Chicago thug playbook.

    The denial is strong with this one. They lost so someone had to do something illegal or immoral. So convinced of the rightness of their opinion, they can’t entertain the idea that they might just be wrong.

  • colnago80

    Here’s the wife swapper and climate change denier George Will weighing in, accusing the chief justice of overthrowing the Constitution. When is the Washington Post going to give this fuckken asshole the heave ho.

  • gerryl

    Yesterday I looked up the word “unhinged” in the dictionary. Next to the entry was a picture of Antonin Scalia.

  • Area Man

    Oh FFS. I just saw a link to an article in The Blaze (Wayne Root) asking “Was Supreme Court Justice John Roberts Blackmailed?”

    Should we tell Root that Roberts’ vote wasn’t even necessary to secure a majority, and that threatening to reveal Kennedy’s multiple affairs with Hollywood starlets was all Obama had to do? Nah…

  • garnetstar

    I was also wondering why the case was taken at all. Four justices have to vote to take it, I believe, so Kennedy and/or Roberts must have voted with the Evil Trio. Why?

    Kennedy was so vehemently opposed to Obamacare in Sibelius, did he think this may have been a chance to rid us of it? He was really steamed, he truly thought it unconstitutional. But then, when he actually heard the arguments in King, they were so weak that he couldn’t go along with them? He would just look too foolish?

    And, why isn’t Kennedy getting any blowback from the right? Roberts has “betrayed” them, but they’ve just given up any hope of Kennedy?