King v. Burwell: Who Writes the Laws in the United States?

by Carrie Severino | March 3rd, 2015

Obamacare. It’s either the best thing since sliced bread or – as more Americans think – a deadly mix of government incompetence and intrusiveness. So when the Supreme Court decided to hear King v. Burwell, a case billed as having the potential to fatally undermine the law, both sides agreed a lot was at stake. Yet there is more riding on the case than just the survival of Obamacare. The Court’s decision this term will actually determine who ultimately writes the laws in this country: Congress or a politicized agency like the IRS.

The original Obamacare Supreme Court challenge, NFIB v. Sebelius – dealt with the constitutionality of the individual mandate. This term’s big case , by contrast, addresses the law’s subsidy provisions. And this time Obamacare’s defenders are fighting the text of the law itself.

The Affordable Care Act’s proponents assume d all states would jump at the chance to create exchanges to sell Obamcare-compliant insurance policies. But because the federal government doesn’t actually have the authority to force the states’ hand, the law also includes an escape clause: if a state fails to set up an exchange, the federal government will.

Yet when the rubber hit the road, nearly two-thirds of the states decided they didn’t want anything to do with implementing the unpopular legislation. That’s why we got the disaster, which transformed the word “glitch” into a term of art.

These states’ decision not to be complicit with Obamacare triggered another section of the ACA. The section describing who is eligible for subsidies clearly provides that those subsidies are only available for plans “enrolled in through an Exchange established by the State.”

There is no end to speculation about why those words are in the statute. Some – including one of the law’s architects, MIT professor Jonathan Gruber – have explained it as an incentive to get each state to set up an exchange. After all, dangling money in front of states is a time-honored way to persuade states to do what Congress wants, ranging from criminal law enforcement to environmental law. Others think the reference to state exchanges simply reflects the prevailing assumption that all states would be on board. Still others seem to think the words were some horrible typo that has taken on a life of its own.

But at the end of the day, the question isn’t why the law’s drafters wrote the language the way they did, what an individual Member of Congress voting on the law thought it contained, or if they even read it at all.  To paraphrase Rep. Nancy Pelosi, we who waited until the law was passed have found out what was in it, and that text – voted on by Congress and signed by the president – is now the law of the land.

Or it should be.

The IRS, however, decided it wouldn’t do to only have the subsidies operating in a minority of states, so it issued a regulation interpreting “Exchange established by the State” to include exchanges established by the federal government. It’s that regulation the King v. Burwell petitioners have challenged as unlawful.

There has been a lot of talk of the sky falling if the IRS regulation is declared unlawful, but the justices shouldn’t let that confuse the legal analysis. For one thing, there are already at least a half-dozen serious solutions being discussed in Congress that would provide temporary access to insurance for individuals affected by the Court’s ruling, creating a window of opportunity for Congress to find a solution that all fifty states can live with. If this case provides a vehicle for the president to finally make good on his campaign promises to reach across the aisle and work for all Americans regardless of their politics, then it will have been a huge success.

But most importantly, this case is about more than who gets which subsidies. It will determine whether Congress still has the last word on making law. Allowing the IRS to “fix” the statute by rewriting it would only intensify the judiciary’s involvement in political battles over the ACA. The Court should resist the temptation to join those who elevate their judgment over that of Congress, and simply let the text of the ACA speak for itself.