There is a disturbing lack of alarm over the U.S. Supreme Court’s decision to hear a case that could seriously undermine the Affordable Care Act. If the plaintiffs are upheld, subsidies would be stripped from health insurance policies sold on the federally run exchange that serves 36 states.
Without the subsidies, millions of Americans, including thousands in North Carolina, would not be able to afford their premiums. Without that support, the new health care law itself may not be sustainable, putting the health insurance of millions more Americans in jeopardy.
What’s especially galling about the threat is that the challenge rests not on a fundamental claim of illegality, but on what defenders of the ACA are calling a “typo.” The plaintiffs in the case, King v. Burwell, argue that a portion of the law stipulates that the IRS can provide tax credits only on policies purchased through state-operated marketplaces, or exchanges. The law does indeed say exchanges “established by the state,” but there is no indication in the preparation of the law or its implementation that federally run exchanges were to be excluded from subsidies.
Defenders of the law say “state” in this instance refers merely to “government established.” Furthermore, interpreting the phrase literally and narrowly contradicts the obvious intent of the health care law’s authors and the congressional majority that passed it. That intent was and is to get insurance to as many uninsured Americans as possible.
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Taking aim at a ‘typo’
Nonetheless, this particular language is regrettably ambiguous. If it were a less-contentious bill, a corrective amendment would be added. But Democrats dare not risk putting the ACA back on the floor of a Republican-controlled House. So the imprecise wording – the so-called typo – remains, and the law now faces a hearing before a Supreme Court that includes at least four justices who are hostile to it.
ACA opponents are making two arguments to strike subsidies from policies sold on a federal exchange. One rests on myopic literalism. That is the letter of the law must take pre-eminence regardless of how it subverts the law’s intent and the real hardship it could impose on so many. This is an absurdly isolated and rigid view clearly taken to promote the broader end of gutting the law.
Some conservative opponents of the law are taking another tack. They say the law’s authors hoped to badger states into setting up exchanges by withholding subsidies from states that didn’t do so. But if this was to be a goad, why was it never mentioned? Throughout the debate over the law and as states established or deferred on exchanges, no one on either side said buyers in states that opted out would lose their subsidies. Democrats who sponsored the bill have said there was never any plan to prod states into setting up their own exchanges.
Seizing on comments
Conservatives say they’ve found a “smoking gun” concerning this buried intent in comments by Jonathan Gruber, a health law expert who helped craft the ACA. Gruber did say on one occasion that the subsidies would be a carrot for establishing state exchanges. But he now says he was wrong, and conservative sleuths have found no other evidence of anyone ever mentioning the subsidies in the sense of an incentive for state-run exchanges.
Four out of six federal judges who have reviewed cases citing the disputed phrase have found that the narrative of the law’s creation and the law’s plain intent trump objections based on a “you-say-tomAto, I-say-tomahto-type” reading of one phrase.
This is a silly case that has entered a sobering stage. Lawmakers in states whose residents use the federal exchange could defuse the problem by simply adopting a state exchange or partnering with the federal exchange. But those states are led by Republicans, many of whom would rather let thousands of their residents lose insurance than see the ACA spared damage.
In North Carolina, supporters of the ACA and those benefiting from it – including individuals and hospitals – should urge lawmakers to establish an exchange that would comply with the disputed provision before the Supreme Court rules. That’s not likely to happen, but it could if Republicans decide that improving access to health care is more important than legal gamesmanship to subvert the president’s signature accomplishment.