When the Supreme Court reviewed the Affordable Care Act two and a half years ago, many of the law’s supporters turned up their noses at the legal debate. They believed the law's constitutionality was so obvious that it hardly needed stating. The law survived by a single vote. And now that the Supreme Court is targeting the ACA once again—this time, the justice are weighing whether the law’s tax credits are legal on federally run state exchanges—health-care reform advocates are not taking any chances. The last week has seen a veritable avalanche of critical coverage of what the normally circumspect Linda Greenhouse called a “naked power grab by conservative justices.”
But many of these advocates, despite their good intentions, are inadvertently recycling their opponents’ misleading talking points. Most common is the idea that the law contains a “glitch” or “drafting error.” The New York Times’ Margot Sanger-Katz recently wrote that the opponents’ case “rests on a sentence in the law that many of its authors describe as a drafting error.” Similarly, the redoubtable Paul Krugman wrote that the Court “may be willing to deprive millions of Americans of health care on the basis of an equally obvious typo.” To the same effect, Mother Jones’s Nick Baumann observed: “The case hinges on … a mistake that conservatives claim invalidates most of the subsidies the bill provides to help people buy insurance.”
The idea of a “glitch” in the ACA should not be so readily repeated. Instead, it should be handled as a crafty piece of conservative spin. The law’s opponents first floated the idea of a “glitch” in the months after the ACA was signed into a law. They said a four-word phrase, “established by the state,” buried in a subsection of the law setting out the methodology for calculating tax credits, effectively banned federally run exchanges from issuing credits. However, by the time they argued their case before the D.C. federal court earlier this year, they were arguing that Congressional Democrats “consciously and purposefully” intended to bar premium assistance in federal exchanges as a means of “coercing” states to create and run exchanges of their own. Judge Thomas Griffith on the D.C. Circuit Court rejected that argument as “lacking persuasive evidence” but then revived the “glitch” idea. In effect, Judge Griffith proclaimed, “Sure, the ‘established by the state’ phrase on which opponents rely may well have been a mistake, at odds with the ACA’s purpose—but so what? It’s what the law says. My hands are tied. If it’s a mistake, it’s up to Congress to fix it.”
In fact, this “courts can’t fix Congress’-mistake” mantra is a diversion from the real legal question in this case. The Court’s challenge is to determine what the ACA—as a whole, all its pertinent provisions, including but not limited to the four-word phrase—prescribes for federally facilitated exchanges. A “holistic” contextual frame has repeatedly been endorsed, at least in principle, by even the most rigorous of “textualists,” including Justice Scalia. Viewed in that light, it becomes well-nigh impossible to rebut the administration’s case. A section of the law, separate from the provision containing the “established by the state” phrase on which opponents rely, directs the secretary of Health and Human Services, in the event a state fails to run an exchange on its own, to establish “such Exchange.” Multiple other provisions confirm the logical reading of that language—that “such Exchange” is to be the functional equivalent of the exchange the state might have established, in all material respects, with identical mission, responsibilities, functions, and authorities—including the authority to provide affordability tax credits. For example, the statute defines “Exchange” (with a capital “E”) as an “exchange established by the state,” then uses that defined capital “E” term pervasively, including in the provision directing HHS to step into the shoes of states declining to act on their own. Hence, for purposes of the ACA, as a matter of law, federally facilitated “Exchanges” are “exchanges established by the state.”
Characterizations of the issue as a “glitch” or a “drafting error” or a “typo” are neither accurate nor innocuous. To be sure, with 20-20 hindsight, the drafters of the ACA could have stated, in so many words, either that tax credits were to be available on “all exchanges, federal and state,” as ACA supporters understand the law, or “only on state exchanges,” as opponents would have it. But such language issues mark every question that gets to court, especially the Supreme Court, about how to apply any law to particular circumstances. As James Madison observed in Federalist #37, “All new laws, though penned with the greatest technical skill, are more or less obscure and equivocal, until their meaning be … ascertained by particular discussions and adjudications.”
Nevertheless, Griffith’s reasoning could have broad appeal among the high court’s conservatives. His opinion echoed pieties in several recent Supreme Court opinions that judges lack power to “revise clear statutory terms that turn out not to work in practice.” Such a judicial modesty riff could seem a marketable rationale for a decision to strip health insurance from millions of individuals and crash individual insurance markets that the law was designed to benefit. Broad embrace of that frame could mitigate Chief Justice John Roberts’ professed “worry” about popular “perceptions” of the Court as politicized, and boost conservatives’ confidence that they can portray a decision to gut the ACA as consistent with Roberts’ pledge to “keep the partisan divide on the other side of First Street.”
A second, related rhetorical misstep pits Congress’ “intent” or “purpose” versus the statute’s “text.” Thus, Michigan Law School’s Nicholas Bagley, an especially sophisticated expert on the ACA, summarized the question before the Court as: “Should the courts hold Congress to a literal interpretation of statutory text, however unlikely it is that Congress intended that result … despite the fact that, sometimes, what Congress meant to convey and what Congress actually said can point in opposite directions?” But, as repeatedly stressed by DOJ, its allies, and a majority of federal judges, the ACA’s prime purpose is not untethered from its text; on the contrary that purpose is pervasively written into the law. Indeed, the text used by the authors to state the purpose of the Act, as well as the relevant Title (“Quality Affordable Care For All Americans”, Subtitle (“Affordable Coverage Choices for All Americans”), and section (“Refundable tax credit providing premium assistance for coverage under a qualified health plan” [qualified health plan includes plans on federal Exchanges]), in which the phrase on which the opponents rely, all run counter to their perverse interpretation.
Opponents’ reading flouts not only the law’s general purpose of promoting universal affordable health insurance, but particular provisions necessary to achieve that overall goal. These include the provisions structuring the exchanges, protecting people with pre-existing conditions and related insurance reforms, and the individual mandate to carry insurance or pay a penalty. The question in the case is whether the law’s text effectuates those provisions, or, as ACA opponents insist, must be interpreted so as to ensure their failure. On any fair, contextual reading, it is that perverse result, not the statute, which must fail.