question #2

Comentar At the could do Congress could do pedanta The Achat Care AC Act. The by the this nga choice that would be made C Can Botha des that this ronale hope it was the low Toda opalon changes the erywhere. We sa interpretation for the sake sw Scotuscare me Affordable Care Act. That Paint Protect ledeninde pendent Sebes This could major components past. But this Court's in order to save them from tity The Act that Congresso bed through the years. The some ileany individalahar- pretation they have e orele pape This Covit edasthurther saw that the comme use Mients to the State means does not the federal mandate tal Medicaid payments to the behance. So the mandate Sanhed by the Statement sed by the State will be cited by The Act that Congress passed tend to the confusion of honest every State to accept expansios rece. And the cases will publish for: of Medicaid program, or else is losing the couraging truth that the Supreme Medicaid funding. This Cout, howe Court of the United States favors son laws that the Spending Clause does not the ens, and is prepared to do whatever it be this coercive condition. Soit wat testo hold and assist its favorites the law to withhold only the one Int. Discussion Questions in his recent book, The Court and the America and the New Global Realities og lustice Stephen freye was when deciding difficult textual questions, courts look to testo tradition, precedent purpose, and consequences in your plan, which the majority or that of the dissent- addresses those factors mont satisfactory 2. you explain the logic behind the holding, and is it persuasive to you! 3. What are the death splashe refers to What effect has the ACA had on the percentage of the population without health Insurance since the individual and employer andates began to take effect in 2014 5. What is the current status of Medical expansion in your state and nationwide! arow designed to expand coverage in the indi- ald cr The Patient Protection and Affordable Care Act adopts a series of interlocking reforms Chapter 3: Health Reform, Access to Care, and Admission and Discharge 93 The Court Decides King . Burwell 135 S. Ct. 2480 (2015) Roberts, Chief Justice health insurance in those states could buy it, and insurers could not deny coverage or charge a higher premium because of preexist vidual health insurance market. First, the Act ing conditions. The opinion continues. bars insurers from taking a person's health The guaranteed issue and community rat- into account when deciding whether to sell ing requirements achieved [the goal of mak- health insurance or how much to charge. ing Insurance available to all), but they had Second, the Act generally requires each per- an unintended consequence: They encour- son to maintain insurance coverage or make aged people to wait until they got sick to buy a payment to the Internal Revenue Service. insurance. Why buy Insurance coverage when And third, the Act gives tax credits to certain you are healthy, if you can buy the same cov people to make insurance more affordable. erage for the same price when you become In addition to those reforms, the Act ill? This consequence-known as "adverse requires the creation of an "Exchange" in selection"-led to a second: Insurers were each State-basically, a marketplace that forced to increase premiums to account for allows people to compare and purchase the fact that, more and more, it was the sick insurance plans. The Act gives each State the rather than the healthy who were buying opportunity to establish its own Exchange, Insurance. And that consequence fed back csit but provides that the Federal Government will into the first: As the cost of insurance rose, establish the Exchange if the State does not. even more people waited until they became This case is about whether the Act's ill to buy it. Interlocking reforms apply equally in each This led to an economic "death spiral." State no matter who establishes the State's As premiums rose higher and higher, and Exchange. Specifically, the question pre- the number of people buying insurance sank sented is whether the Act's tax credits lower and lower, insurers began to leave are available in States that have a Federal the market entirely. As a result, the num- Exchange ber of people without insurance increased dramatically. 1 ... In 1996, Massachusetts adopted the A guaranteed issue and community rating Here the Chief Justice summarizes what he requirements and experienced similar results. calls a long history of failed health insur- But in 2006, Massachusetts added two more ance reform" including two related concepts reforms: The Commonwealth required indi- that several states adopted in the 1990s: 0 viduals to buy insurance or pay a penalty, and "guaranteed issue" requirement and a "com- it gave tax credits to certain individuals to munity rating" requirement. Together these ensure that they could afford the insurance reforms meant that anyone who wanted they were required to buy. The combination that (continued The Law of Healthcare Administration have a Federal Exchange rather than a State Exchange. The Act initially provides that tax credits "shall be allowed for any applicable sachusetts to 2.6 percent, by far the lowest in taxpayer." 26 U.S.C. 536B(a). The Act then provides that the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through an Exchange established by the State (under 5 who enrolled in an insurance plan through That table is provided to enable the student to follow Chief Justice Roberts's rather com 94 continued from previous page of these three reforms --Insurance market regulations, a coverage mandate, and tax credits-reduced the uninsured rate in Mas. the Nation. B The opinion next describes the ACA's reform 18031 of the ACA) provisions: (1) adoption of the guaranteed [To implement these provisions, the issue and community rating requirements: (2) IRS promulgated a rule that made tax a requirement for Individuals to have insur credits available to applicable taxpayers ance or make a tax payment to the IRS - the Individual mandate" upheld in NFIB v. Sebe. on Exchange regardless of whether the llus, see p. 67 of the textbook --and the Exchange was established by the state or by giving of tax credits to low-income persons to HHS. At the time the opinion was written, help make insurance more affordable.) These three reforms are closely inter 34 states had opted to let HHS set up their twined. ... Congress found that the guar- particular Exchanges. The petitioners in this anteed issue and community rating require. case were four residents of Virginia who do ments would not work without the coverage not want to buy health insurance. They argue requirement. And the coverage requirement that (a) Virginia's exchange, which was set would not work without the tax credits. The up by HHs, does not qualify as an Exchange reason is that, without the tax credits, the established by the State" under 18031, (b) cost of buying insurance would exceed eight they should not receive tax credits, (c) with percent of income for a large number of out the credits the cost of insurance would individuals, which would exempt them from be more than 8 percent of their income, and the coverage requirement. The ACA exempts (d) therefore they are exempt from the Indi- from the individual mandate anyone who vidual mandate. These arguments failed at would have to spend more than 8 percent of both the trial court and Court of Appeals (4th his income on health Insurance.) Circuit) levels; however, in a similar case the Court of Appeals for the D.C. Circuit held that the tax credits are available only for state In addition to those three reforms, the Act requires the creation of an "Exchange" in exchanges. This split of opinion between the each State where people can shop for insur- two appellate circuits led to the Supreme ance, usually online. An Exchange may be Court deciding to grant certiorari.) created in one of two ways. First, the Act provides that "telach State shall... establish The Affordable Care Act addresses tax credits II an American Health Benefit Exchange...for the State. Second, if a State nonetheless in what is now Section 36B of the Internal Revenue Code.... [Refer to the table titled "Statutory Provisions Referred to in King Burwell" on p. 100 for the text of this and other provisions referred to in the opinion chooses not to establish its own Exchange, the Act provides that the Secretary of Health and Human Services "shall ... establish and operate such Exchange within the State." The issue in this case is whether the Act's tax credits are available in States that plex analysis.) The parties dispute whether Section 36B authorizes tax credits for individuals who enroll in an insurance plan through a Federal Exchange. Petitioners argue that a Federal Exchange is not an Exchange established that the IRS Rule therefore contradicts Sec do so, Section 18041 provides that the Sec retary "shall... establish and operate such Exchange within the State." By using the phrase "such Exchange." Section 18041 instructs the Secretary to establish and operate the same Exchange that the State was directed to establish under tion 368. The Government responds that the Section 18031.... In other words, State les Rule (referred to earlier is lawful because Exchanges and Federal Exchanges are equiva- the phrase "an Exchange established by the lent-they must meet the same require- State under [42 U.S.C. $18031) should be ments, perform the same functions, and read to include Federal Exchanges. serve the same purposes. Although State and ... It is ... our task to determine the Federal Exchanges are established by differ- correct reading of Section 36B. If the statu- ent sovereigns, Sections 18031 and 18041 do tory language is plain, we must enforce it not suggest that they differ in any meaningful according to its terms. But oftentimes the way. A Federal Exchange therefore counts as "meaning-or ambiguity-of certain words "an Exchange" under Section 36B. or phrases may only become evident when Second, we must determine whether placed in context." [Quoting an earlier a Federal Exchange is "established by the Supreme Court case.) So when deciding State" for purposes of Section 36B. At the whether the language is plain, we must read outset, it might seem that a Federal Exchange the words in their context and with a view to cannot fulfill this requirement. After all, the their place in the overall statutory scheme." Act defines "State" to mean "each of the Our duty, after all, is to construe statutes, 50 States and the District of Columbia" -a not isolated provisions." definition that does not include the Federal Government. But when read in context, "with a view to [its place in the overall statutory We begin with the text of Section 36B. As rel- scheme," the meaning of the phrase "estab- evant here, Section 36B allows an individual lished by the State" is not so clear. to receive tax credits only if the individual ... These provisions suggest that the Act enrolls in an insurance plan through "an may not always use the phrase "established Exchange established by the State under [42 by the State" in its most natural sense. Thus, U.S.C. $18031)." In other words, three things the meaning of that phrase may not be as must be true: First, the individual must enroll clear as it appears when read out of context. In an insurance plan through "an Exchange." Third, we must determine whether a Fed- Second, that Exchange must be established eral Exchange is established "under [42 U.S. by the State." And third, that Exchange must C. $18031)." This too might seem a require. be established under 142 U.S. C. $18031)." ment that a Federal Exchange cannot fulfill We address each requirement in turn. because it is Section 18041 that tells the Sec- First, all parties agree that a Federal retary when to "establish and operate such Exchange qualifies as "an Exchange" for Exchange." But here again, the way different purposes of Section 36B. Section 18031 pro- provisions in the statute interact suggests vides that "leach State shall ... establish an otherwise. American Health Benefit Exchange... for the The Act defines the term "Exchange" to State."... (But) if the State chooses not to mean "an American Health Benefit Exchange (continued 96 The Law of Healthcare Administration compatible with the rest of the law." (citinga 1988 Supreme Court decision. Here, the state. tory scheme compels us to reject petitioners interpretation because it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the the Act to avoid. See New York State Dept. of very "death spirals that Congress designed Social Servs. v. Dublino, 413 U.S. 405.419-426 (1973) ("We cannot interpret federal statutes to As discussed earlier, Congress based the first, the guaranteed issue and community at it is implausible that Congress meant the Ad tion of Independent Business v. Sebelius, 567 U continued from previous page) established under section 18031." if we Import that definition into Section 18041, the Act tells the Secretary to establish and oper ate such 'American Health Benefit Exchange established under section 18031." That sug- gests that Section 18041 authorizes the Sec. retary to establish an Exchange under Sec. tion 18031, not (or not only) under Section 18041. Otherwise, the Federal Exchange, by definition, would not be an "Exchange" at all. negate their own stated purposes."). This interpretation of "under (42 U.S.C. $18031" fits best with the statutory context. Affordable Care Act on three major reforms All of the requirements that an Exchange must meet are in Section 18031, so it is sensible to regard all Exchanges as established under that ing requirements: second, a requirement that provision. In addition, every time the Act uses individuals maintain health insurance cover. the word "Exchange." the definitional provi- age or make a payment to the IRS; and third, sion requires that we substitute the phrase the tax credits for individuals with household "Exchange established under section 18031." incomes between 100 per cent and 400 per if Federal Exchanges were not established cent of the federal poverty line. In a State that under Section 18031, therefore, literally none establishes its own Exchange, these three of the Act's requirements would apply to them. reforms work together to expand insurance Finally, the Act repeatedly uses the phrase coverage. The guaranteed issue and commu- "established under 142 U.S.C. $18031" In situ- nity rating requirements ensure that anyone ations where it would make no sense to distin- can buy insurance; the coverage require guish between State and Federal Exchanges. A ment creates an incentive for people to do so Federal Exchange may therefore be considered before they get sick, and the tax credits-it one established "under (42 U.S.C. 518031]." is hoped-make insurance more affordable. ... The Affordable Care Act contains more Together, those reforms "minimize ... adverse than a few examples of inartful drafting. (To selection and broaden the health insurance cite just one, the Act creates three separate risk pool to include healthy individuals, which Section 1563s. See 124 Stat. 270, 911, 912.) will lower health insurance premiums." ... Anyway, we must do our best, bearing in mind the fundamental canon of statutory Under petitioners' reading, however, the construction that the words of a statute must Act would operate quite differently in a State be read in their context and with a view to with a Federal Exchange. As they see it one their place in the overall statutory scheme." of the Act's three major reforms-the tax credits-would not apply. And a second major B reform-the coverage requirement-would not apply in a meaningful way.... The combina tion of no tax credits and an ineffective cover age requirement could well push a State's indi- vidual insurance market into a death spiral... to operate in this manner. See National Feder- S. (2012) (SCALIA, KENNEDY, THOMAS, and Given that the text is ambiguous, we must turn to the broader structure of the Act to determine the meaning of Section 36B. "A provision that may seem ambiguous in isolation is often clari- fied by the remainder of the statutory scheme ... because only one of the permissible mean- ings produces a substantive effect that is to apply in every State as well... D 8 EL AL/TO, IL dissenting ("Without the federal sub- sidies... the exchanges would not operate as Congress intended and may not operate at all."). Congress made the guaranteed issue and com- munity rating requirements applicable in every work when combined with the coverage require- Stare in the Nation. But those requirements only men and the tax credits. So it stands to reason that Congress meant for those provisions to law is." Marbury v. Madison, 1 Cranch 137. Care, and Admission and Discharge 97 177 (1803). That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done. A fair reading of legislation demands a fair understanding of the legislative plan. Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent Subpart II.C of the opinion is omitted.) with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress's plan, and that is the ar Petitioners' arguments about the plain mean. reading we adopt. at ing of Section 368 are strong. But while the The judgment of the United States Court meaning of the phrase "an Exchange estab- of Appeals for the Fourth Circuit is lished by the State under (42 U.S.C. $18031) Affirmed. may seem plain when viewed in isolation." such a reading turns out to be "untenable JUSTICE SCALIA, with whom JUSTICE In light of the statute) as a whole." In this THOMAS and JUSTICE ALITO join, dissenting. Instance, the context and structure of the The Court holds that when the patient Act compel us to depart from what would Protection and Affordable Care Act says otherwise be the most natural reading of the "Exchange established by the State" it pertinent statutory phrase. means "Exchange established by the State Reliance on context and structure in statu- or the Federal Government." That is of course tory interpretation is a "subtle business, call- quite absurd, and the Court's 21 pages of ing for great wariness lest what professes explanation make it no less so. to be mere rendering becomes creation and ... This case requires us to decide attempted interpretation of legislation becomes whether someone who buys insurance on legislation itself." Palmerv. Massachusetts, 308 an Exchange established by the Secretary U.S. 79, 83 (1939). For the reasons we have gets tax credits. You would think the answer given, however, such reliance is appropriate in would be obvious-so obvious there would this case, and leads us to conclude that Section hardly be a need for the Supreme Court to 36B allows tax credits for insurance purchased hear a case about it. In order to receive any on any Exchange created under the Act. Those money under $36B, an individual must enroll credits are necessary for the Federal Exchanges in an insurance plan through an "Exchange to function like their State Exchange counter- established by the State." The Secretary of parts, and to avoid the type of calamitous result Health and Human Services is not a State. that Congress plainly meant to avoid. So an Exchange established by the Secre- tary is not an Exchange established by the State-which means people who buy health In a democracy, the power to make the insurance through such an Exchange get no law rests with those chosen by the people. money under $36B. Our role is more confined to say what the Words no longer have meaning if an Exchange that is not established by a State (continued 98 The Law of Healthcare Administration The Court's decision reflects the philoso- phy that judges should endure whatever interpretive distortions it takes in order to correct a supposed flaw in the statutory Court: The Affordable Care Act must be saved. American people's decision to give Congress "all legislative Powers" enumerated in the Constitution. Art. 1, 51. They made Congress, not this Court, responsible for both making the Court. If Congress wants to accommodate both goals, it could make tax credits available everywhere while offering new incentives for francined from previous page) is established by the State."... Under all the usual rules of interpretation, in short, the Government should lose this case. But normal rules of interpretation seem always to I wholeheartedly agree with the Court that sound interpretation requires paying laws and mending them. This Court holds attention to the whole law, not homing in only the judicial power--the power to pro- on isolated words or even isolated sections. nounce the law as Congress has enacted it. Context always matters. Let us not forget, We lack the prerogative to repair laws that do however, why context matters: It is a tool for not work out in practice, just as the people understanding the terms of the law, not an lack the ability to throw us out of office if excuse for rewriting them. they dislike the solutions we concoct. We Ordinary connotation does not always prevail, but the more unnatural the proposed must always remember, therefore, that "Tolur task is to apply the text, not to improve upon interpretation of a law, the more compelling the contextual evidence must be to show it." (Quoting a 1989 case.)... that it is correct. Today's interpretation is ... It is not our place to judge the quality not merely unnatural; it is unheard of. Who of the care and deliberation that went into would ever have dreamt that "Exchange this or any other law. A law enacted by voice established by the State" means "Exchange vote with no deliberation whatever is fully as established by the State or the Federal binding upon us as one enacted after years Government"? of study, months of committee hearings, and weeks of de bate. Much less is it our place to Faced with overwhelming confirmation make everything come out right when Con that "Exchange established by the State gress does not do its job properly. It is up to means what it looks like it means, the Court Congress to design its laws with care, and it comes up with argument after feeble argu- is up to the people to hold them to account if ment to support its contrary interpretation. they fail to carry out that responsibility. None of its tries comes close to establishing Rather than rewriting the law under the the implausible conclusion that Congress pretense of interpreting it, the Court should used by the State" to mean "by the State or have left it to Congress to decide what to do not by the State." about the Act's limitation of tax credits to (For the next twelve pages the pugnacious state Exchanges. If Congress values above and irascible Justice Scalia excoriates the majority opinion and impeaches its reason- everything else the Act's applicability across ing. He accuses his six colleagues of "liggery. able in every Exchange. If it prizes state the country, it could make tax credits avall. pokery" (underhanded scheming), calls a portion of the opinion "pure applesauce," involvement in the Act's implementation, it and says it engages in "defense of the inde- could continue to limit tax credits to state fensible." He writes that the majority's logic Exchanges while taking other steps to miti "suffers from no shortage of flaws," and he gate the economic consequences predicted by calls it a "dismal failure." He concludes with the following peroration.) 99 States to set up their own Exchanges. And if Congress thinks that the present design of the slon. Having transformed two major parts Act works well enough, it could do nothing. Congress could also do something else alto- gether entirely abandoning the structure of the Affordable Care Act. The Court's insistence on making a choice that should be made by Congress both aggrandizes judicial power and Chapter 3: Health Reform, Access to Care, and Admission and Discharge funds associated with the Medicaid expan- encourages congressional lassitude ..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 Inde. pendent Business v. Sebelius, 567 U.S. this Court revised major components of the statute in order to save them from unconsti- tutionality. The Act that Congress passed pro- vides that every individual "shall maintain insurance or else pay a "penalty." 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. The Act that Congress passed also requires every State to accept an expansion of its Medicaid program, or else risk losing all Medicaid funding. This Court, however, saw that the Spending Clause does not autho- rize this coercive condition. So it rewrote the law to withhold only the incremental 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 work- ing as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare. 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 somer- saults 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 for ever 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. I dissent. Discussion Questions 1. In his recent book, The Court and the World: American Law and the New Global Realities (2015). Justice Stephen Breyer writes, "Ordinarily, when deciding difficult textual questions, courts look to text, history, tradition, precedent, purpose, and consequences." In your opinion, which opinion-the majority's or that of the dissent- addresses those factors more satisfactorily? 2. Can you explain the logic behind the chief justice's holding, and is it persuasive to you? 3. What are the death spirals" he refers to? 4. What effect has the ACA had on the percentage of the population without health insurance since the individual and employer mandates began to take effect in 2014? 5. What is the current status of Medicaid expansion in your state and nationwide