ObamaCare or ScotusCare


I saw the decision by the Supreme Court of the United States (SCOTUS) in King v. Burwell and I was curious to see what logic led to their result. Upon reading the majority opinion, I felt compelled to comment on the flaws of the opinion. Fortunately for me, Justice Scalia did a fine job of pointing out the many logical flaws of the majority.

In essence, the opinion rewrites the tax credits in 26 U.S.C. §36(B) that are available in places where a State creates an exchange. Now the credits are available in states with Federal exchanges as well in spite of the language that only included state exchanges.

Both opinions concur that this law has “inartful drafting”, which is a nice way of saying those in Congress who passed this did not read it, and did a pathetic job writing it. Congress even labeled three different §1563’s. Under normal circumstances this would have been fixed in the normal legislative process, but the nature of this law being forcibly pushed through without discussion or debate prevented this kind of reasoned discussion and redrafting.

This is now the third time that the Supreme Court has rewritten this law. The first was that the word “penalty” was rewritten to the word “tax”. This is particularly notable since those in Congress in favor of this expressly stated it was not a tax when they passed it.

The second time the Supreme Court rewrote the law was over Medicaid expansion. The threat in the law was that the State must create an exchange or lose ALL federal Medicaid funding. It was rewritten to say that a state would only lose Medicaid funds associated with the expansion if the state did not create an exchange. This is particularly compelling when the majority claims that State and federal exchanges are the same thing when the legislative intent of this portion of the law clearly favored the creation of State exchanges. In fact in intended to make a very serious threat to any state that did not comply and create an exchange. (This is actually more common in federal statutes than many outside of law realize).

Today, according to the majority, there is no difference between the phrases, “Exchange established by the State” it (now) means “Exchange established by the State or the Federal Government.” Justice Scalia sates it well that “That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.”

In fact, Justice Scalia found at least seven different places where “Exchange established by the State” is used. He notes the illogical conclusions that are reached by using the majority’s legislative rewrite, including having a state run the website for a federal exchange.

This is a question of poor legislation. Had the Supreme Court simply read the law and allowed the result written, there were and still are opportunities for federal legislators to amend their own laws. A rewrite by the Supreme Court was outside of their power, and the wrong way to do this.

Justice Scalia summarizes the situation well. “Today’s opinion changes the usual rules of statutory interpretation for the sake of the Affordable Care Act.” “…And the cases will publish forever 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.” “We should start calling this law SCOTUScare.”

This is intended as a summary of some of the issues in this case. For the opinion go to http://www.supremecourt.gov/ and find King v. Burwell decided 6/25/15.

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Michael Bear has a degree in Business Administration from the Ohio State University, a Juris Doctor from Ohio Northern University, and is a practicing attorney in multiple jurisdictions including the State of Ohio.