King v. Burwell
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| King v. Burwell | |
| Docket number: 14-114 | |
| Court: United States Supreme Court | |
| Court membership | |
| Chief Justice John G. Roberts Associate Justices Antonin Scalia Anthony Kennedy • Clarence Thomas Ruth Bader Ginsburg • Steven G. Breyer Samuel Alito • Sonia Sotomayor • Elena Kagan | |
At issue in King v. Burwell was whether the Affordable Care Act, commonly called Obamacare, permitted the IRS to grant tax credits to individuals who purchased their health insurance from the federal health insurance exchange in addition to the state exchanges. If tax subsidies were not available for insurance plans purchased through federal exchanges, an estimated 6.4 million Americans would have been impacted, and the three interconnected reforms of the law would have been undermined.[1]
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Enacted in 2010, the Affordable Care Act implemented three principal changes to federal healthcare law:
- Health insurance companies are required to offer policies to individuals with pre-existing conditions.
- Generally, individuals must purchase healthcare insurance or pay a tax penalty.
- The federal government will provide tax credit subsidies to make healthcare more affordable for lower-income individuals.[3]
The law also required each state to have an exchange through which individuals could compare and purchase insurance policies. Each state could develop the exchange or have the Secretary of Health and Human Services (HHS) do so, instead. As of June 2015, 34 states have elected to have HHS establish a federal exchange in lieu of a state exchange.[3]
The ACA states an individual is eligible for a tax credit if he or she enrolls in an insurance plan through "an Exchange established by the State."[4] Consequently, the Internal Revenue Service (IRS) promulgated a rule allowing tax credits for insurance plans purchased in both state and federal exchanges.[3]
Case history
The petitioners in King v. Burwell were four residents of Virginia who did not want to purchase health insurance. They would be exempt from Obamacare's coverage requirement if the price of buying health insurance cost more than 8 percent of their individual incomes. With tax credit subsidies, the cost of the petitioners' policies would not pass the 8 percent threshold. The petitioners argued that because Virginia uses a federal exchange rather than a state exchange, a literal reading of the statute would prohibit them from receiving a tax credit, and consequently, exempt them from the coverage mandate.[3]
They first filed suit in the Eastern District Court of Virginia, which dismissed the case in 2014, "holding that the Act unambiguously made tax credits available to individuals enrolled through a Federal Exchange."[3] Later that year, the Court of Appeals for the Fourth Circuit affirmed. The Fourth Circuit argued that because there were "at least two different interpretations," under the canon of statutory interpretation inscribed in Chevron v. Natural Resources Defense Council, the court would defer to the IRS that tax credits were available for plans from both state and federal exchanges.[3]
The Supreme Court granted certiorari on November 7, 2014, and oral arguments were heard on March 4, 2015.[5]
Decision
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|---|---|---|---|---|---|
| Chief Justice John Roberts | Justice Anthony Kennedy | Justice Ruth Bader Ginsburg | Justice Stephen Breyer | Justice Sonia Sotomayor | Justice Elena Kagan |
On June 25, 2015, the Supreme Court affirmed the Fourth Circuit in a 6-3 decision, holding "that Section 36B allows tax credits for insurance purchased on any Exchange created under the Act."[3] Chief Justice John Roberts, who authored the opinion, was joined by Justices Anthony Kennedy, Ruth Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.
Roberts conceded that "at the outset," a federal exchange does not semantically seem to be an exchange "established by the State." However, "when read in context, 'with a view to [its] place in the overall statutory scheme,' the meaning of the phrase 'established by the State' is not so clear," according to Roberts.[3]
For comparison, Roberts identified another section of the law that would be nonsensical if read for plain meaning: the definition of a qualified individual as an individual "who resides in the State that established the Exchange." Roberts explained, "If we give the phrase 'the State that established the Exchange' its most natural meaning, there would be no 'qualified individuals' on Federal Exchanges. But the Act clearly contemplates that there will be qualified individuals on every Exchange."
Similarly, Roberts argued, accepting the petitioners' literal interpretation "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."[3] Therefore, Roberts stated, "In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase."[3] Relying on this contextual interpretation, the Court bypassed giving deference to the IRS' interpretation under Chevron, as the Fourth Circuit had done.
Presuming opposition to the decision, Roberts described the distinction between the role of the courts and the role of Congress. He wrote, "In a democracy, the power to make the law rests with those chosen by the people. Our role is more confined–'to say what the law is.' That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done. A fair reading of legislation demands a fair understanding of the legislative plan."[3]
Roberts concluded, "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. Section 36B can fairly be read consistent with what we see as Congress's plan, and that is the reading we adopt."[3]
Dissent
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Joined by Justices Clarence Thomas and Samuel Alito, Justice Antonin Scalia authored a dissent accusing the majority of "chang[ing] the rules of statutory interpretation for the sake of the Affordable Care Act."[3] The case is straightforward, according to Scalia. "In order to receive any money under §36B, an individual must enroll in an insurance plan through an 'Exchange established by the State.' The Secretary of Health and Human Services is not a State. So an Exchange established by the Secretary is not an Exchange established by the State—which means people who buy health insurance through such an Exchange get no money under §36B." If interpreted in any other way, Scalia argued, "Words no longer have meaning."[3]
Scalia also noted that "other parts of the Act sharply distinguish between the establishment of an Exchange by a State and the establishment of an Exchange by the Federal government." According to Scalia, to read "by the state" to include "by the state or the Federal government" would be both duplicative and nullifying of other sections of Obamacare.[3]
Concluding his dissent, Scalia offered harsh criticism of not only this case, but also the 2012 case, National Federation of Independent Business et al. v. Sebelius. Scalia wrote, "Perhaps the Patient Protection and Affordable Care Act will attain the enduring status of the Social Security Act of the Taf-Hartley Act; perhaps not. But this Court's two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed ('penalty' means tax, 'further [Medicaid] payments to the State' means only incremental Medicaid payments to the State, 'established by the State' means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence. And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites."
In one memorable line summarizing his position, Scalia wrote, "We should start calling this law SCOTUScare."[3]
Reaction
Following the ruling on June 25, 2015, President Barack Obama, speaking from the White House, said, "Five years ago, after nearly a century of talk, decades of trying, a year of bipartisan debate, we finally declared that in America, health care is not a privilege for a few but a right for all. The Affordable Care Act is here to stay."[6]
Recent News
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See also
- Major cases of the Supreme Court October 2014 term
- Supreme Court of the United States
- Obamacare
- Obamacare lawsuits
- Effect of the Affordable Care Act in the states
Footnotes
- ↑ The Washington Post, "6.4 million Americans could lose Obamacare subsidies, federal data show," June 2, 2015
- ↑ Supreme Court of the United States, "On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Fourth Circuit," July 15, 2014
- ↑ 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 SupremeCourt.gov, "King v. Burwell, No. 14-114," June 25, 2015
- ↑ Cornell University Law School, "26 U.S.C. §36B"
- ↑ SCOTUSblog, "King v. Burwell," accessed June 25, 2015
- ↑ CNN, "Supreme Court saves Obamacare," June 25, 2015
