Jason Millman summarizes yesterday’s news:
The federal appeals court in the District of Columbia ruled 2-1 this morning that the Affordable Care Act doesn’t authorize the federal government to provide subsidies to low- and middle-income Americans to buy insurance in the 36 states where the federal government set up exchanges to sell health-care coverage. Just two hours later, a three-judge panel of the Fourth Circuit Court of Appeals in a similar case unanimously found just the opposite — that the IRS correctly interpreted the text of the ACA when it issued a rule allowing all public exchanges, regardless of who set them up, to provide insurance subsides.
Emily Badger explains what the lawsuits hinge on:
This latest legal challenge focuses on four words in the mammoth law authorizing tax credits for individuals who buy insurance through exchanges “established by the States.” Thiry-six states declined to set up their own exchanges — far more than the law’s backers anticipated — and in those states, consumers have been shopping for health care on exchanges run instead by the federal government. Now the D.C. Circuit Court of Appeals has ruled that these consumers are not eligible for subsidies because, well, they bought their insurance on exchanges not “established by the States.”
This is a tremendously literal interpretation of a small but crucial part of the law, and it’s one that was arguably never intended by its creators.
Greg Sargent joins the debate over the meaning of “established by the States”:
[T]he phrase does not literally say that subsidies should not go to people who get subsidies from the federal exchange, which under the law must be established in states that decline to set up their own exchanges. In fairness, opponents are right — the phrase also does not literally say that subsidies should go to those on the federal exchange. But all of that is precisely what makes the statutory language in question ambiguous. Once you accept this point — that the meaning of the phrase is not clear — then there is ample precedent for the courts evaluating the intent of Congress as expressed in the whole statute.
Philip Klein quotes from the DC federal appeals court ruling, the one which went against the administration:
“We reach this conclusion, frankly, with reluctance,” they wrote. “At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges.”
Adrianna McIntyre disagrees with this logic: