It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
Today’s opinion changes the usual rules of statutory
interpretation for the sake of the Affordable Care Act.
That, alas, is not a novelty. In National Federation of
Independent Business v. Sebelius, 567 U. S. ___, this Court
revised major components of the statute in order to save
them from unconstitutionality. The Act that Congress
passed provides that every individual “shall” maintain
insurance or else pay a “penalty.” 26 U. S. C. §5000A.
This Court, however, saw that the Commerce Clause does
not authorize a federal mandate to buy health insurance.
So it rewrote the mandate-cum-penalty as a tax. 567
U. S., at ___–___ (principal opinion) (slip op., at 15–45).
The Act that Congress passed also requires every State to
accept an expansion of its Medicaid program, or else risk
losing all Medicaid funding. 42 U. S. C. §1396c. This
Court, however, saw that the Spending Clause does not
authorize this coercive condition. So it rewrote the law to
withhold only the incremental funds associated with the
Medicaid expansion. 567 U. S., at ___–___ (principal
opinion) (slip op., at 45–58). Having transformed two
major parts of the law, the Court today has turned its
attention to a third. The Act that Congress passed makes
tax credits available only on an “Exchange established by
the State.” This Court, however, concludes that this limitation
would prevent the rest of the Act from working as
well as hoped. So it rewrites the law to make tax credits
available everywhere. We should start calling this law
Perhaps the Patient Protection and Affordable Care Act
will attain the enduring status of the Social Security Act
or the Taft-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.
Health Insurance Exchanges and Their Federal Subsidies
The ACA requires each State to establish a health-insurance “exchange.” Each exchange is a one-stop marketplace for individuals and small businesses to compare community-rated health insurance and purchase the policy of their choice. The exchanges cannot operate in the manner Congress intended if the Individual Mandate, Medicaid Expansion, and insurance regulations cannot remain in force.
The Act’s design is to allocate billions of federal dollars to subsidize individuals’ purchases on the exchanges. In-dividuals with incomes between 100 and 400 percent of the poverty level receive tax credits to offset the cost of insurance to the individual purchaser. 26 U. S. C. §36B (2006 ed., Supp. IV); 42 U. S. C. §18071 (2006 ed., Supp. IV). By 2019, 20 million of the 24 million people who will obtain insurance through an exchange are expected to receive an average federal subsidy of $6,460 per person. See CBO, Analysis of the Major Health Care Legislation Enacted in March 2010, pp. 18–19 (Mar. 30, 2011). Without the community-rating insurance regulation, however, the average federal subsidy could be much higher; for community rating greatly lowers the enormous premiums unhealthy individuals would otherwise pay. Federal subsidies would make up much of the difference.
The result would be an unintended boon to insurance companies, an unintended harm to the federal fisc, anda corresponding breakdown of the “shared responsibil-ity” between the industry and the federal budget that Congress intended. Thus, the federal subsidies must be invalidated.
In the absence of federal subsidies to purchasers, insurance companies will have little incentive to sell insurance on the exchanges. Under the ACA’s scheme, few, if any, individuals would want to buy individual insurance policies outside of an exchange, because federal subsidies would be unavailable outside of an exchange. Difficulty in attracting individuals outside of the exchange would in turn motivate insurers to enter exchanges, despite the exchanges’ onerous regulations. See 42 U. S. C. §18031. That system of incentives collapses if the federal subsidies are invalidated. Without the federal subsidies, individ-uals would lose the main incentive to purchase insurance inside the exchanges, and some insurers may be unwilling to offer insurance inside of exchanges. With fewer buyers and even fewer sellers, the exchanges would not operate as Congress intended and may not operate at all.
There is a second reason why, if community rating is invalidated by the Mandate and Medicaid Expansion’s invalidity, exchanges cannot be implemented in a manner consistent with the Act’s design. A key purpose of an exchange is to provide a marketplace of insurance options where prices are standardized regardless of the buy-er’s pre-existing conditions. See ibid. An individual who shops for insurance through an exchange will evaluate different insurance products. The products will offer different benefits and prices. Congress designed the exchanges so the shopper can compare benefits and prices. But the comparison cannot be made in the way Congress designed if the prices depend on the shopper’s pre-existing health conditions. The prices would vary from person to person. So without community rating—which prohibits insurers from basing the price of insurance on pre-existing conditions—the exchanges cannot operate in the manner Congress intended.