Should Obamacare be derailed by a single sentence?

November 11, 2014


Most disputes that end up at the U.S. Supreme Court are about the interpretation of the Constitution and statutes, not about facts. The press is mostly left to provide the basic background of the dispute and then quote each side’s lawyers. Little independent digging is required.

But a case about the Affordable Care Act, or Obamacare, that the high court decided to take up last week, is different.

The case, King v. Burwell, hinges on whether the wording of one sentence of the 906-page law that defies common sense and seems to negate a linchpin of the law — the availability of federal subsidies to middle-class families so they can buy health insurance — should somehow outweigh other provisions in the law that contradict that sentence.

The sentence in question seems to allow federal subsidies only to people buying insurance on exchanges “established by the states,” when, in fact 35 states opted to let the federal government run their exchanges for them, which was also provided for in the law.

Other sections of the law state or imply that subsidies are available to people to buy insurance on these federally-established exchanges. And the entire law was clearly based on the idea of everyone being entitled to the subsidies.

When the meaning of a federal law ends up being disputed in court because the wording is vague or internally contradictory, the dispute turns on the kinds of facts journalist are used to digging out. That’s because judges are supposed to try to figure out what the legislators intended the law to mean and to do.

To be sure, the government’s briefs in trying to fight off this new challenge to Obamacare from its die-hard Republican opponents (including the Oklahoma state attorney general who, oddly, is fighting to take away his constituents’ right to get the subsidies), do take a stab at proving what should be obvious. Their briefs in these cases present a good case that the senators and representatives indeed meant to provide subsidies even in states that declined to set up their own exchanges.

But the lawyers’ chronicle of what happened when Obamacare was being written — of what the facts demonstrate about the legislative intent — is far less convincing than what I suspect some good reporters could come up with.

Maybe the government lawyers were gun-shy about embarrassing the congressional staffers who obviously screwed up. The staffers’ mistake — using shorthand parlance in one place that everyone working on the law understood but that can lend itself to a twisted meaning by those who want to twist it — in my view rises barely above the level of a typographical error. But it now threatens the most significant domestic legislation passed in the last 50 years. Whatever the reason, the government lawyers’ account of the legislative intent was relatively threadbare compared to what it could be.

In completing a book on the saga of Obamacare, due out in about seven weeks, I thought the argument in King v. Burwell by the Obamacare opponents was so absurd that I didn’t spend much time on it. But what I did find out is that no legislator or staff member on either side of the aisle that I spoke with ever thought that the subsidies would not go to the states using the federal exchange, and that the confusion and inconsistency in the wording was the result of some last-minute cutting and pasting of a phrase from a prior draft.

Put simply, from what I can tell, the Obamacare opponents’ current argument that the sentence they have homed in on was put there to penalize states that did not set up their own exchanges is not something that was on the minds — or that emerged in the conversations, memos or drafts — of anyone involved in the negotiating, writing and passing of Obamacare.

But, again, I did not spend a lot of time on this. Other reporters, not brief writers, should be able to do a much better job of establishing that.

Someone should ask Senator Charles Grassley (R-Iowa) or any members of his staff about it. Though he ultimately declined to vote for it, Grassley and his team were the Republicans most intimately involved in the drafting and negotiating of Obamacare. Many of its best provisions were drafted by Grassley and his staff.

I casually asked Grassley about this King argument in June – well before this case looked like any federal judge would be partisan enough to buy it. He shrugged if off. In fact, the idea that blocking subsidies for states that used the federal exchange was something he didn’t even seem to understand conceptually. He seemed not to even know what I was talking about.

Another credible source would be former Senator Olympia Snowe (R-Me.), who was also immersed in the details of the bill as it was being considered.

Reporters should go beyond Snowe or Grassley (especially since he might now be unwilling to own up to what he thinks of the plaintiffs’ position) and get some willing sources on Capitol Hill to let them scour the files of the multiple Senate and House committees that worked on the bill. I am sure they will find lots of smoking-gun evidence that not only proves the negative — that no one ever thought to limit the subsidies that way == but proves that in estimating the cost of the law the assumption was always that subsidies for families in every state would be provided.

A review of the documents could start with a white paper issued in November 2008 by the father of the Affordable Care Act — former Montana Senator Max Baucus — who on page 20 describes how the subsidies would be available to all Americans. I can all but guarantee that no document prepared after that contradicts that principle.

Someone should ask the staff of the non-partisan Congressional Budget Office if in “scoring” the cost of the bill, they ever considered not counting the costs of providing subsidies to families in states on the federal exchange. They never issued such a score, and they are supposed to score legislation based on the instructions they get from both sides of the aisle. Why wouldn’t they have issued a score estimating the reduced cost for not giving subsidies to families signing up on the federal exchanges?

Beyond the merits of the litigation — which, again, journalists have a unique opportunity to shed light on — someone should start working on a story about what the aftermath would be following a decision killing the subsidies in federal-exchange states. (It still seems unlikely, but less so after four justices decided last week to take this shaky case.)

Will Republican governors really opt to have hundreds of thousands, or millions, of their constituents who were able to get health insurance because of the subsidies now lose their policies? Or might they agree to let their exchanges be categorized as “established by the state” because in all states, state insurance regulators govern the insurance sold on the exchanges.

Unlike the issue of federal subsidies on the exchanges for the middle class, Obamacare explicitly allowed states to choose whether to expand Medicare in their states, again using federal subsidies. That, itself is another argument against the plaintiffs. If Congress was explicit about providing choice for the states in one provision, why wouldn’t it have done so in the provision establishing subsidies on the exchanges?

Even judges who are wary of delving too far into legislative intent usually accept the legal principle that in interpreting legislation they should assume that Congress would not hide major provisions of a law in an unclear clause.

It’s one thing for Republican governors, such as Rick Perry in Texas or Rick Scott in Florida, to refuse to take advantage of a different provision in Obamacare allowing them to expand Medicare, leaving poor people in their states much worse off than the poor in neighboring states. But will these Republicans opt to short-change their middle class political base the same way?


PHOTO: People wait in line to enter the U.S. Supreme Court in Washington Nov. 10, 2014. REUTERS/Larry Downing 

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