Over at Darwin’s Fool, I posted a critique of the Fourth Circuit’s opinion in King v. Burwell. Unlike the D.C. Circuit’s ruling in Halbig v. Burwell, the Fourth Circuit held that the IRS has the authority to issue subsidies in states with federal exchanges, despite the fact that the Patient Protection and Affordable Care Act repeatedly says subsidy recipients must enroll in coverage “through an Exchange established by the State.” I reproduce here my response to a commenter to that post, as his argument parallels those of many others who have been critical of these cases.
My commenter objected that a plain-text reading “must include the entire text of the bill,” which “makes clear that the goal of the bill was to provide health care to all Americans who needed it and could not, at that time get it.” Moreover, “It would be illogical for Congress to establish a national health care system that is based on subsidies and then not include those subsidies in all aspects,” thus “it is entirely reasonable to interpret that one sentence to mean that Congress intended the subsidies for all participants.” My reply:
Sir, I’m afraid you have things exactly backward.
The overall context of the PPACA presents no difficulty for the plaintiffs in King v. Burwell, Halbig v. Burwell, or the other cases challenging subsidies in federal exchanges. The text of the eligibility rules for those subsidies clearly and repeatedly limit eligibility to those who enroll in coverage “through an Exchange established by the State.” There is nothing in the broader context of the statute to suggest that Congress understood the words “established by the State” to have any meaning other than their usual meaning. There isn’t even any statutory language that conflicts with that plain meaning. Jonathan Adler and I addressed (almost) all of these supposed anomalies here.
On the contrary, it is the Obama administration and its supporters for whom both the text and context present difficulties. (We can no longer call them supporters of the PPACA, given how adamantly opposed they are to implementing the law as Congress intended.) The subsidy-eligibility rules are the only place where Congress spoke directly to the question at issue. Those rules flatly contradict the administration’s position. Congress did not throw the phrase “established by the State” around loosely. They referred to exchanges “established by the State” when they meant exchanges established by the states. They referred generically to “an Exchange” when they meant either a state-established or a federal exchange. And they referred to state-established and federally established exchanges separately within a single provision, which shows they saw a difference between the two. Congress also did the exact same thing – withholding subsidies from residents of uncooperative states – in the PPACA’s other massive new entitlement program, the Medicaid expansion.