SCOTUS: ACA’s “Interlocking Reforms” Trump “Inartful Drafting”

Jul 26, 2015 | Blog

Lawyers pick apart words and phrases for a living. But it may be harder to attack the Affordable Care Act (also known as “Obamacare”) in this way after the Supreme Court’s decision affirming tax subsidies under the Act’s federal exchanges in King v. Burwell.

In the interpretation of laws, courts are obligated to take a broader view with a broader perspective that takes into account context and the intent of the law.  They must, as Justice Roberts wrote for the majority in the 6-3 decisions upholding the federal exchange subsidies under the Affordable Care Act, “read words in their context and with a view toward their place in the overall statutory scheme.”

The challenge to the tax subsidies for purchases of insurance on federal exchanges hinged on the phrase “established by the State.” That phrase is used several times in the many pages of the Act, often, as the Court pointed out, with regard to identical requirements for State and Federal exchanges. Justice Roberts was not sparing in his criticism of the laws’ text, calling its drafting “inartful” and “far from a chef d’oevure of legislative draftsmanship.”

But, “the intent of the Affordable Care Act was to improve health insurance markets, not destroy them,” Justice Roberts wrote.  The Act has three pillars, he explained: availability of coverage to all, a requirement that all must have coverage, and tax credits to those who cannot afford the coverage.” Removing one of the pillars, in this case the tax credits, would result in “death spirals” that would destroy the individual insurance market, and that is surely not what Congress intended.

King v. Burwell is probably not the last challenge to the Affordable Care Act, but it bodes ill for those who would challenge it by taking phrases of a law that is admittedly not great literature (and what law is?) and contending that one phrase or provision can take down the legislative whole.

If you have questions regarding the Affordable Care Act, please contact Kenneth N. Rashbaum.