Editor’s Desk

King v. Burwell: What did Congress mean by "an Exchange established by a State."

Peter Wehrwein
Editor

If you're into health care policy and law, tomorrow is your Superbowl, World Series, and World Cup all rolled into one.  

Oral arguments for King v. Burwell are scheduled to start tomorrow at 10 a.m. As Richard Mark Kirkner explained in our February issue, the case could uphold the ACA or severely crimp the law by eliminating premium subsidies in the 34 states that use the federal health exchange.

The ACA has been resilient, and many health care interests would rather live with the law, despite its flaws, than see it come undone.

The politics are tricky. People may complain mightily about "Obamacare," but Republicans are worried about blowback if millions of Americans lose premium subsidies and thus health care coverage. Ben Sasse, a Republican senator from Nebraska, has proposed that Congress extend Cobra-like coverage to those who bought policies on the federal exchanges if the plaintiffs succeed in King v. Burwell

We won't know whether they did till the court ruling comes out in late June or July.

Meanwhile, many a gigabyte has been used analyzing and handicapping King v. Burwell.

The best one-stop-shop for following King v. Burwell is the Scotusblog. Vox's Sarah Kliff has written a history of the case

The case hinges on whether premium subsidies are available only to people who bought coverage on exchanges established by a state.

Elizabeth B. Wydra, chief counsel at the Constitutional Accountability Center, wrote this in the Washington Post:

The act’s challengers argue that Congress included those words as a way to push states to establish their own exchanges by threatening to withhold tax credits from their citizens — and that this “threat” was necessary to secure the crucial vote of then-Sen. Ben Nelson (D-Neb.). But Nelson has gone on record saying that is absolutely false.

Wydra is not a disinterested party. Her organization has filed an amicus brief with the court on behalf of current and former members of Congress and state legislatures supporting the nationwide availability of premium subsidies. 

Nicholas Bagley, a University of Michigan law school professor who was a source in Richard Mark Kirkner's piece about King v. Burwell for Managed Care, made a similar point a few days ago in The  New York Times:

The plaintiffs claim that Congress always meant the fallback exchanges to fail. The potential collapse of the state’s market for individual insurance, they argue, was just another (hidden) threat to get states to establish their own exchanges.

But that’s nonsense. If Congress had meant to punish uncooperative states, it didn’t have to saddle them with dysfunctional exchanges. It could have left them with no exchanges at all. Congress created a fallback because it wanted to enable everyone — even people in states that objected to health care reform — to secure affordable insurance. That’s the only way to make sense of the law as a whole.

But Michael Cannon, health policy director of the libertarian Cato Institute, disagrees with Wydra and Bagley. In Kliff's narrative, Cannon is a central character in the legal genesis and strategizing that resulted in tomorrow's high court legal drama. In November, Cannon wrote a myth-deblunking post on the Scotusblog that said that Congress considered variations of premiums subsidies and exchanges during the sausage-making of the ACA and that the language in the statute is purposeful and intended: 

Many bills Congress considered in 2009-2010 offered exchange subsidies in all states. Other bills offered exchange subsidies only in states that cooperated on implementation. Some members undoubtedly preferred the former type. The one that passed Congress, however was the latter type. The fact that that was the only bill that could pass Congress means that members voting for the ACA intended to enact this restriction, even if they ideally would have preferred another bill.

Who is right, Wydra and Bagley or Cannon? It will be up to the Supreme Court decide. It may be a very interesting summer in American health care.