Supreme Court already said DC Court was wrong on Obamacare subsidies

SCOTUSBuildingThe Supreme Court has already spoken on the DC Circuit’s three judge panel’s 2-1 decision that subsidies are only available for insurance purchased through state exchanges. This decision contradicted the decision of a unanimous three judge panel for the 4th Circuit Court of Appeals (Virginia).

How could that be? That DC Circuit panel only ruled the other day.

Now, the Supreme Court didn’t actually rule that quickly.

And there is no time machine that could convey a ruling from the future back to our time.

But, nonetheless, the Supreme Court has weighed in.

Even more, the conservatives on the Supreme Court have stated that the Affordable Care Act created subsidies for health insurance whether or not a federal or state exchange was involved.

What did they say and when?

As Professor Abbe R. Gluck of Yale Law School points out, that understanding of Affordable Care Act was contained in the dissent to the Supreme Court case that upheld the individual mandate as constitutional.

Gluck writes:

Sophisticated textual analysis of complex laws like this one requires attention to the statutory text as a whole, in context, and not in isolation. That’s how the Virginia appeals court read the ACA today, and the Supreme Court itself offered the same admonition last month, through an opinion by Justice Antonin Scalia in the EPA case.

In fact, it was Justice Scalia himself, together with Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito, who interpreted the health reform statute precisely this way in the 2012 health reform case—holistically, and assuming the statutory text makes subsidies available on state and federal exchanges alike.

In their joint dissent, they wrote:

“Congress provided a backup scheme; if a State declines to participate in the operation of an exchange, the Federal Government will step in and operate an exchange in that State.”

And then: “In the absence of federal subsidies to purchasers, insur­ance companies will have little incentive to sell insurance on the exchanges. … That system of incentives collapses if the federal subsidies are invalidated.”

The dissenters also assumed: “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”—numbers that only make sense if the federal exchanges are included.

So there you have it.

While one never can be certain about what the Supreme Court will do if it takes a case, the four Justices who held that the mandate was unconstitutional in 2012 then understood the Affordable Care Act to provide subsidies for insurance bought through the federal and state exchanges.

Amy Fried

About Amy Fried

Amy Fried loves Maine's sense of community and the wonderful mix of culture and outdoor recreation. She loves politics in three ways: as an analytical political scientist, a devoted political junkie and a citizen who believes politics matters for people's lives.