Brianne J. Gorod (@BrianneGorod) is appellate counsel at Constitutional Accountability Center.
When the Court decided to hear King v. Burwell last November, there was a lot of anxiety that the writing was on the wall. But both of the Court’s decisions this morning—in King and in the fair housing case—are a good reminder: what matters in the end is not the Court’s decision to hear a case, but what the Court ultimately decides. And what the Court decided today was an unqualified win for the Affordable Care Act. There was a lot of speculation coming into this morning that the Court might rely on Chevron or constitutional avoidance to give the government a win. Instead, the Court relied only on the law itself and long-settled principles of statutory interpretation to hold that tax credits must be available in all states nationwide. As the Chief Justice wrote for the Court, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. . . . [The provision at issue] can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.”
In an opinion joined by Justice Kennedy, as well as the Court’s more liberal members, the Chief Justice both made clear why the Court’s decision was clearly the right one—and also why opponents of the ACA should stop looking to the courts to try to achieve what they’ve failed to achieve in Congress. The ACA is here to stay.
First, the Chief Justice’s opinion for the Court made clear that the text, structure, and purpose of the ACA all make clear that tax credits must be available nationwide, on both state-run and federally-facilitated exchanges. As the Court repeatedly reiterated, there was a fundamental flaw in the argument advanced by the law’s opponents. That argument relied on just four words—“established by the State”— in the formula for calculating the amount of the tax credit, but ignored the rest of the 900-page law. As the Chief Justice put it, “Our duty, after all, is ‘to construe statutes, not isolated provisions.’” Thus, as he explained repeatedly over the course of the opinion, “we must read the words [of a law] ‘in their context and with a view to their place in the overall statutory scheme.’”
Looking carefully at the context of the law and the overall statutory scheme, a majority of the Court properly concluded that the question is not even a close one: the law makes clear that tax credits should be available nationwide. Most significantly, the Court’s opinion recognized the relevance of the purpose and goals of the statute in understanding what its text requires. The very first sentence of the opinion explains that the ACA is a “series of interlocking reforms designed to expand coverage in the individual health insurance market,” and the opinion goes on to explain how those “interlocking reforms” work. Importantly, looking at the history of state experiments in health reform in the 1990s, the Chief recognized that “economic ‘death spiral[s]’” could result if certain reforms (such as prohibiting the denial of coverage based on a preexisting condition) were implemented without other reforms (namely, a mandate to purchase insurance, coupled with tax credits to make it affordable). Recognizing that the ACA was shaped by these state experiences, the Chief recognized that “the statutory scheme compels us to reject petitioners’ interpretation because it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress designed the Act to avoid.” More simply, “[i]t is implausible that Congress meant the Act to operate in this manner,” the Chief wrote.
The Court also recognized the important role that structure can play in making sense of a complicated statute and understanding what Congress intended. One of the primary arguments offered by the law’s challengers was that Congress intentionally limited tax credits to state-run exchanges to encourage states to set up their own exchanges. A brief filed on behalf of leading members of Congress at the time the law was enacted, as well as members of state legislatures who helped implement the law in their states, argued that that was never the way the law was understood at the time it was enacted or at the time it was implemented. Moreover, the brief noted that it would have made no sense to bury this important limitation on the availability of tax credits in the formula for calculating the amount of the tax credit: “Drawing the connection between the tax credits and the Exchanges so obliquely— especially in the context of other language in [the relevant provision] expressly making the credit available to all applicable taxpayers, regardless of where they live—would hardly have made sense if, as Petitioners argue, the purpose of the tax credit was to induce States to establish their own Exchanges.” The Chief Justice made the exact same point, noting that one must “div[e] several layers down into the Tax Code” to find the relevant language and rejecting the idea that “Congress made the viability of the entire Affordable Care Act turn on the ultimate ancillary provision: a sub-sub-sub section of the Tax Code.” Rather, he explained: “Had Congress meant to limit tax credits to State Exchanges, it likely would have done so in the definition of ‘applicable taxpayer’ or in some other prominent manner. It would not have used such a winding path of connect-the-dots provisions about the amount of the credit.”
Following this careful look at the statute’s text, structure, and purpose, the Chief’s conclusion was simple: “Section 36B allows tax credits for insurance purchased on any Exchange created under the Act. Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”
The Court’s decision this morning has produced a lot of winners. First is the Obama Administration. Its signature legislative achievement has been helping millions of Americans access health insurance, and as a result of today’s decision, it will continue being able to do that. Moreover, the Court sent a strong message to opponents of the ACA who would bring legally baseless claims to the courts to help them achieve what they cannot achieve through the political process: stop trying. As the Chief explained in no uncertain terms, the power to make the laws rests with Congress, and in interpreting a law passed by Congress, the Court should not “undo what it has done.” Applying that general principle to health care, he observed, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.” That is what the Court did in this case, and the message is clear: that’s what it will do in the future, as well.
The second winner: the American people. If this case had come out differently, the consequences would have been huge—as the Court itself said, such a ruling would have produced exactly the consequences that Congress was trying to avoid. Congress passed the ACA to increase access to health insurance, and an adverse decision from the Court in King would have done exactly the opposite. Everyone in states with federal Exchanges would have been affected, not just those receiving the tax credits. So everyone in those states should be very happy today.
Finally, the third winner: the Court itself. As the Chief’s opinion makes clear, the Court’s decision today was the only one consistent with long-established principles of statutory construction, not to mention the text and history of the ACA. But three justices still managed to come out the other way. Indeed, Justice Scalia’s dissent called the majority’s conclusion “absurd” and accused the Court of engaging in “interpretive jiggery-pokery” and “somersaults” to save the ACA (invoking examples not just from today’s case, but from the 2012 constitutional case). Scalia pretends that he—rather than the majority—is the one engaging in impartial statutory interpretation, but his opinion all but drips with contempt for the ACA and the Court decisions that have upheld it: “We should start calling this law SCOTUScare,” he writes.
Opinions like Scalia’s are what lead members of the public to conclude that the justices are just politicians in robes and that the Court is just an “extension of the political process”—exactly what the Chief Justice has repeatedly said he does not want. Today, by fairly interpreting the law and applying well-established principles of statutory construction, the Chief Justice and Justice Kennedy helped show that at least some justices can sometimes put law over politics. Let’s hope they continue to do that in the future.