Right-Wing Media “Can't Admit To Doubt” In Coverage Of Obamacare Challenge

The Supreme Court will soon hear King v. Burwell, a  challenge to tax credits for consumers who live in states that refused to set up their own health care exchanges under the Affordable Care Act (ACA) and instead relied on the federal version. Right-wing media have repeatedly insisted that the ACA can only have been written to deny Americans affordable health insurance, but experts call this argument “political activism masquerading as statutory restraint.”

ACA Challengers' “Unyielding Conviction” In Their Theory Is A Betrayal Of Conservative-Endorsed Statutory Interpretation

Law Professor Nicholas Bagley: Because Of The Legal Deference Given To Agency Explanation Of Law, Right-Wing “Doubt Means They Lose. This latest challenge to the ACA is the brainchild of Michael Cannon, a Forbes contributor and Cato Institute director, and Jonathan Adler, a law professor and blogger for The Washington Post's Volokh Conspiracy Blog, who argue that tax credits for insurance bought on the federal exchange are illegal because the statute provides them only through state exchanges. In a forthcoming article, University of Michigan law professor Nicholas Bagley argues that in addition to “fail[ing] to offer persuasive reasons to adopt their peculiar interpretation of the ACA,” their refusal to “acknowledge the possibility that maybe, just maybe, they're wrong” is highly troubling:

Adler and Cannon have offered a strained interpretation of the ACA that, if accepted, would make a hash of other provisions of the statute and undermine its stated purpose of extending insurance to nearly all Americans. The more natural reading -- one that makes far better sense of the statute as a whole -- is that tax credits are available in both the states that established exchanges and those that did not. On this view, the “by the State” language just reflects Congress's assumption, unchallenged at the time, that the states would establish their own exchanges.

But even if you think that Adler and Cannon's claim is plausible, maybe even attractive, the contrary interpretation offered by the government is at least reasonable. That brings me to the aspect of their argument that troubles me the most: their unyielding conviction that they've identified the only possible construction of the ACA. Nowhere do they so much as acknowledge the possibility that maybe, just maybe, they're wrong.

That's because they can't admit to doubt. Because of the deference extended to agency interpretation, doubt means they lose. But their unwillingness even to acknowledge ambiguity reflects an important difference between legal advocacy and neutral interpretation. To be clear, Adler and Cannon deserve immense credit for their lawyerly ingenuity: they've constructed a facially plausible argument in support of an exceedingly strange interpretation of the ACA. But the courts would violate their obligation of fidelity in statutory construction if they mistook that ingenuity for genuine obeisance to congressional will. The latest challenge to the ACA is political activism masquerading as statutory restraint. [Journal of Health Politics, Policy and Law, accessed 12/10/14]

The New Republic: “The Latest Challenge To Obamacare Should Embarrass Conservative Judges.” As Brian Beutler at The New Republic explained, Cannon and Adler's unwavering belief in their own position is a legal necessity, since courts generally defer to federal agencies' interpretation of an ambiguous law. As Beutler pointed out, “if there's any ambiguity -- if the challengers' reading of the law isn't obviously the only reasonable way to read it -- then those challengers should lose”:

When the Supreme Court decides whether to void Affordable Care Act subsidies in dozens of states that didn't establish their own insurance exchanges, the most important word the justices will have to grapple with won't be the word “exchange” or “established” or “state.” It will be the word “unambiguous.”

To quote Justice Antonin Scalia, the question before the justices (or at least the textualists among them) will be whether the words of the ACA statute, “in their context and with a view to their place in the overall statutory scheme,” unambiguously mean that the IRS cannot and should never have subsidized health insurance in Healthcare.gov states.

That's what the challengers in King v. Burwell claim. But if there's any ambiguity -- if the challengers' reading of the law isn't obviously the only reasonable way to read it -- then those challengers should lose.

This so-called Chevron deference standard is an exceptionally high bar for the law's opponents to clear. It helps explain the right's strained and ongoing effort to rewrite the political and legislative histories of Obamacare by positing an alternate reality in which the bill's authors either intentionally, or through sheer cluelessness, pledged to destroy insurance markets in states that didn't collaborate with the ACA's socialist health care scheme, and never told anyone.

It also requires conservative lawyers and judges backing the challengers to exhibit the kind of unsavory arrogance that conservative legal theorists have spent decades decrying as the root of liberal judicial activism. Limited interpretive theories, like textualism, are central to the commonly held conservative view that the Constitution demands a small government. Humility -- or the pretense thereof -- thus sits at the core of the conservative legal identity.

But humility is incompatible with sweeping declarations of certainty over highly contested matters. It is impossible at this point to support the ACA subsidy challenge and maintain that pretense. [The New Republic, 12/2/14]

Challengers Have Repeatedly Argued That The Meaning Of The ACA Is “Clear” And That It Intended To Make Insurance Unaffordable For Millions

Michael Cannon and Jonathan Adler: “Credits Are Available Only In States That Create An Exchange Themselves.” On the eve of the 2012 Supreme Court decision on the constitutionality of the “individual mandate,” Cannon and Adler touted the challenge to the legality of tax credits in the federal exchange, arguing it “poses as great a threat to the law as the case now before the high court.” Although the goal of the ACA's exchanges was to provide affordable health insurance, Cannon and Adler nevertheless argued that “the statute is clear” and there is no “statutory authority” for working Americans to receive tax credits if their state refuses to set up an exchange:

This 2,000-page law is complex. But in one respect the statute is clear: Credits are available only in states that create an exchange themselves. The federal government might create exchanges in states that decline, but it cannot offer credits through its own exchanges. And where there can be no credits, there is nothing to trigger that $3,000 tax [for employers who do not offer health benefits].

States are so reluctant to create exchanges that Secretary of Health and Human Services Kathleen Sebelius estimates she might have to operate them for 15 to 30 states. Even if she manages that feat, the law will still collapse without the employer mandate and tax credits.


To prevent that from happening, on May 18 the IRS finalized a rule making credits available through federal exchanges, contrary to the express language of the statute.

Because those credits trigger penalties against employers, the IRS is literally taxing employers and spending billions without congressional authorization. Estimates by the Urban Institute indicate that had this rule been in effect in 2011, it would have cost at least $14.3 billion for HHS to run exchanges for 30 states. About 75% of that is new federal spending; the remainder is forgone tax revenue.

The IRS doesn't have a leg to stand on here. It has not cited any express statutory authority for its decision, because there is none. The language limiting tax credits to state-established exchanges is clear and consistent with the rest of the statute. The law's chief sponsor, Senate Finance Committee chairman Max Baucus (D-Mont.), is on record explaining creation of an exchange is among the conditions states must satisfy before credits become available. Indeed, all previous drafts of the law also withheld credits from states to push them to cooperate. [USA Today, 6/25/12]

Cannon: “I'm 100 Percent Convinced” Congress Intended To Block Federal Health Insurance Tax Credits. In a recent interview with Vox's Sarah Kliff, Cannon doubled down on his claim that the ACA unambiguously prohibits the IRS from authorizing affordable tax credits to federal exchange consumers. Cannon further argued that he was “convinced that they're illegal,” even though if this lawsuit is successful it will “take away health coverage from millions of people”:

Sarah Kliff: Are you 100 percent convinced it was Congress's intent to withhold subsidies in the federal exchange?

Michael Cannon: There are two ways to interpret that question. Did the people who wrote this language mean to withhold subsidies in federal exchanges? My answer to that is, I'm 100 percent convinced that they meant to do that.

The other way to think about it is, “Did the people who voted for this law intend to withhold subsidies in federal exchanges?” That's a different question, but the answer is the same. I'm 100 percent convinced that's what the members of Congress who enacted this law meant to do, just the same way I'm 100 percent convinced they meant to throw people off of their existing health plans even though they said, “If you like your health plan, you can keep it.”

What members of Congress might have ideally wanted is different from congressional intent, which is determined by what they actually vote on. If the language of a statute is clear, then that constitutes congressional intent.


Sarah Kliff: What do you think of the people who put the blame on you? There are people who are going to say, if your case wins, “Why did you guys take away health coverage from millions of people?”

Michael Cannon: The first thing I'd say in response is, “If those subsidies are illegal, would you favor or oppose ending them?” So far, no one has said they would favor allowing the president to subsidize people illegally.

Then the question becomes, “Are they legal or are they not?” That's what we've been debating all this time. I'm convinced that they're illegal. [emphasis in original] [Vox.com, 11/19/14]

Right-Wing Media Bought Into The Challengers' Far-Fetched Reading Of The ACA From The Beginning

George Will: “Congress Clearly ... Wanted Subsidies Available Only Through State Exchanges.” In a column earlier this year about a different lawsuit based on the same legal theory as King, Washington Post columnist George Will (a colleague of Jonathan Adler's at the Post), praised the suit's potential to “blow to smithereens” the ACA by revoking essential subsidies for millions of Americans who need them to purchase insurance. According to Will, this interpretation that “could spell its doom” was the clear “malice aforethought” of the law's supporters:

The four words that threaten disaster for the ACA say the subsidies shall be available to persons who purchase health insurance in an exchange “established by the state.” But 34 states have chosen not to establish exchanges.

So the IRS, which is charged with enforcing the ACA, has ridden to the rescue of Barack Obama's pride and joy. Taking time off from writing regulations to restrict the political speech of Obama's critics, the IRS has said, with its breezy indifference to legality, that subsidies shall also be dispensed to those who purchase insurance through federal exchanges the government has established in those 34 states. [Oklahoma Attorney General Scott] Pruitt is challenging the IRS in the U.S. District Court for the Eastern District of Oklahoma, and there are similar challenges in Indiana, Virginia and Washington, D.C.

The IRS says its “interpretation” -- it actually is a revision -- of the law is “consistent with,” and justified by, the “structure of” the ACA. The IRS means that without its rule, the ACA would be unworkable and that Congress could not have meant to allow this. The ACA's legislative history, however, demonstrates that Congress clearly -- and, one might say, with malice aforethought -- wanted subsidies available only through state exchanges. [The Washington Post, 1/29/14, via Media Matters]

Wall Street Journal: “This Ought To Be A Straightforward Matter” For The Courts. In a March 2014 editorial, the Journal claimed that “the IRS brushed off the statute” to “rewrite” the law and clarify the availability of tax credits on the federal exchange. It also claimed that in defending this explanation of the ACA, the administration was asking the court to ignore the intent of Congress by not interpreting it to “self-destruct”:

This ought to be a straightforward matter of statutory construction. Democrats put conditions on the subsidies to pressure Governors to join ObamaCare on the familiar U.S. federal-state cooperative model, but they never anticipated lasting unpopularity and opposition. To resolve this political problem, the IRS brushed off the statute and expanded the subsidies to both types of exchanges.

Arguing before a three-judge panel, Assistant Attorney General Stuart Delery pointed up “interpretive tension” among various complex provisions. But he also suggested that reading the text literally would undermine ObamaCare's purpose and structure of a nationwide system of subsidized health care. Try to parse that one: This is a law that its defenders argue will self-destruct if implemented as drafted by its architects.


As Chief Justice John Roberts famously wrote upholding the insurance purchase mandate, “It is not our job to protect the people from the consequences of their political choices.” It is also not their job to protect politicians from the consequences of their policy choices. [The Wall Street Journal, 3/30/14, via Media Matters]

National Review Online: Denying Affordable Care To Millions Of Americans Was “An Intentional Feature” Of The Affordable Care Act. In 2013, the editors of NRO also refused to acknowledge any ambiguity in their counterintuitive reading of the law, arguing that “the federal government can create its own exchanges within states; however, it has no authority under the law to use them to offer subsidies.” The editorial characterized the legal theory behind the challenges as “ingenious,” and concluded, “Democrats simply failed to anticipate that the majority of states would refuse to create exchanges”:

Oklahoma attorney general Scott Pruitt has found an ingenious way to call a halt to the Obamacare project: Hold the federal government to the letter of that misbegotten law. His fight is a lonely one: While a majority of states signed on to the 2010 lawsuit opposing Obamacare on constitutional grounds, Oklahoma is standing largely alone today.


The tax credits apply only to those using exchanges created by the states. The federal government can create its own exchanges within states; however, it has no authority under the law to use them to offer subsidies and inflict the accompanying taxes.

But there was an unforeseen development: Some 33 states have refused to create those exchanges, Oklahoma among them. If a state's residents are not eligible for exchange subsidies, then its employers are not subject to the associated punitive tax. Contra the administration's amen corner in the media, this was not a rookie drafting error in the legislation -- it was an intentional feature of the bill. The law is explicitly written to deny subsidies to states that refuse to create exchanges. The president and congressional Democrats simply failed to anticipate that the majority of states would refuse to create exchanges. [National Review Online, 6/4/13, via Media Matters]

But Federal Judges Have Repeatedly Rejected The “Straightforward” Interpretation Right-Wing Media Cling To

U.S. District Court For The District Of Columbia: The Plaintiffs' Argument “Runs Counter To [The] Central Purpose Of The ACA.” The district court that heard Halbig v. Sebelius, a companion case based on the same legal theory as King, ruled that “there is simply no evidence in the statute itself or in the legislative history of any intent by Congress to ensure that states established their own Exchanges” by threatening their citizens with unaffordable health insurance. To hold that Congress intended tax credits only for state exchanges would “violate the basic rule of statutory construction that a court must interpret a statute in light of its history and purpose”:

Title I of the ACA is titled “Quality, Affordable Health Care for All Americans” (emphasis added). Plaintiffs' proposed construction in this case -- that tax credits are available only for those purchasing insurance from state-run Exchanges -- runs counter to this central purpose of the ACA: to provide affordable health care to virtually all Americans. Such an interpretation would violate the basic rule of statutory construction that a court must interpret a statute in light of its history and purpose.

Plaintiffs try to explain away the inconsistency between their proposed construction and the statute's underlying purpose by proposing that Congress had another, equally pressing goal when it passed the ACA: convincing each state to set up its own health insurance Exchange. According to plaintiffs, Congress desperately wanted to keep the federal government out of the business of running any Exchange, and it therefore sought to persuade the states to establish and operate the Exchanges. As an inducement, say plaintiffs, Congress made premium tax credits available only to those states that set up their own Exchanges. According to plaintiffs, “Congress obviously wanted subsidies in every state, but it wanted something else. It wanted the states to run it. And they thought they were getting both because they thought it was a deal nobody could refuse.”

Plaintiffs' theory is tenable only if one accepts that in enacting the ACA, Congress intended to compel states to run their own Exchanges -- or at least to provide such compelling incentives that they would not decline to do so. The problem that plaintiffs confront in pressing this argument is that there is simply no evidence in the statute itself or in the legislative history of any intent by Congress to ensure that states established their own Exchanges. And when counsel for plaintiffs was asked about this at oral argument, he could point to none. Indeed, if anything, the legislative history cuts in the other direction and suggests that Congress intended to provide states with flexibility as to whether or not to establish and operate Exchanges.

Nor does plaintiffs' theory make intuitive sense. A state-run Exchange is not an end in and of itself, but rather a mechanism intended to facilitate the purchase of affordable health insurance. And there is evidence throughout the statute of Congress's desire to ensure  broad access to affordable health coverage. It makes little sense to assume that Congress sacrificed nationwide availability of the tax credit ... in an attempt to promote state-run Exchanges.

In sum, while there is more than one plausible reading of the challenged phrase in Section 36B when viewed in isolation, the cross-referenced sections, the surrounding provisions, and the ACA's structure and purpose all evince Congress's intent to make premium tax credits available on both state-run and federally-facilitated Exchanges. [Halbig v. Sebelius, United States District Court for the District of Columbia, 1/15/14, via Media Matters]

U.S. District Court For The Eastern District of Virginia: “There Is No Direct Support In The Legislative History Of The ACA For Plaintiffs' Theory.” The district court that initially ruled in King held that “the text of the ACA and its legislative history evidence congressional intent to ensure broad access to affordable health coverage for all.” The challengers' assumption that Congress intended to punish citizens of states who did not set up exchanges lacks “any support in the legislative history of the ACA [and] indicates that it is not a viable theory”:

In an attempt to divine Congress's intent, both parties cite to various legislative history materials including, but not limited to, past versions of the ACA, committee reports, reports by the Congressional Budget Office (“CBO”) and Joint Committee on Taxation (“JCT”), and finally, even news media. It is firmly established that legislative history is one of the traditional tools of interpretation to be consulted [when interpreting the meaning of a statute].

The legislative history of the ACA is long and complex, and many of the past versions of the ACA are not relevant to the current iteration of the ACA. The very structure of the ACA indicates that “the Senate passed a bill that provided 'flexibility' to each state as to whether it would operate the Exchange.” The relevant legislative history indicates that Congress did not expect the states to turn down federal funds and fail to create and run their own Exchanges. Instead, Congress assumed that tax credits would be available nationwide because every state would set up its own Exchange.

What is clear is that there is no direct support in the legislative history of the ACA for Plaintiffs' theory that Congress intended to condition federal funds on state participation. As previously discussed, had Congress intended to condition tax subsidies it would have needed to provide clear notice. While on the surface, Plaintiffs' plain meaning interpretation of section 36B [of the ACA] has a certain common sense appeal, the lack of any support in the legislative history of the ACA indicates that it is not a viable theory. The legislative history of the ACA “reveals an intent to grant states the option of establishing their own Exchanges, rather than an intent to coerce or entice states into participating.” Further, the text of the ACA and its legislative history evidence congressional intent to ensure broad access to affordable health coverage for all. [King v. Sebelius, District Court of the United States, Eastern District of Virginia, 2/18/14, via Media Matters]

U.S. Court Of Appeals For The Fourth Circuit Concurrence: Challengers' Interpretation Is “Cramped” And “Untethered From Other Parts Of The Operative Text.” In his concurrence to the unanimous appellate opinion in King that rejected Cannon and Adler's legal theory and has been appealed to the Supreme Court, Judge Andre Davis pointed out “no case stands for the proposition that literal readings should take place in a vacuum.” Referencing Chevron deference, Judge Davis noted, “the case law indicates the opposite. So does common sense”:

No case stands for the proposition that literal readings should take place in a vacuum, acontextually, and untethered from other parts of the operative text; indeed, the case law indicates the opposite. So does common sense: If I ask for pizza from Pizza Hut for lunch but clarify that I would be fine with a pizza from Domino's, and I then specify that I want ham and pepperoni on my pizza from Pizza Hut, my friend who returns from Domino's with a ham and pepperoni pizza has still complied with a literal construction of my lunch order. That is this case: Congress specified that Exchanges should be established and run by the states, but the contingency provision permits federal officials to act in place of the state when it fails to establish an Exchange. The premium tax credit calculation subprovision later specifies certain conditions regarding state-run Exchanges, but that does not mean that a literal reading of that provision somehow precludes its applicability to substitute federally-run Exchanges or erases the contingency provision out of the statute. [U.S. Court Of Appeals For the Fourth Circuit, 7/22/14, via Media Matters]

U.S. Court Of Appeals For The D.C. Circuit Dissent: The Supposed Non-Availability Of Tax Credits In The Federal Exchange Is “Nonsense, Made Up Out Of Whole Cloth.” The only appellate court opinion to accept the argument that Congress intended to deny tax credits on the federal exchange was vacated after the full court of appeals decided to rehear the case. However, the appellate court was sharply split over the proper interpretation of the law, and in dissent Judge Harry Edwards argued, “it is inconceivable that Congress intended to give States the power to cause the ACA to 'crumble'”:

There are three critical components to the ACA: nondiscrimination requirements applying to insurers; the “individual mandate” requiring individuals who are not covered by an employer to purchase minimum insurance coverage or to pay a tax penalty; and premium subsidies which ensure that the individual mandate will have a broad enough sweep to attract enough healthy individuals into the individual insurance markets to create stability. These components work in tandem. At the time of the ACA's enactment, it was well understood that without the subsidies, the individual mandate was not viable as a mechanism for creating a stable insurance market.

Appellants' proffered construction of the statute would permit States to exempt many people from the individual mandate and thereby thwart a central element of the ACA. As Appellants' amici candidly acknowledge, if subsidies are unavailable to taxpayers in States with HHS-created Exchanges, “the structure of the ACA will crumble.” It is inconceivable that Congress intended to give States the power to cause the ACA to “crumble.”


Appellants attempt to fortify their position with the extraordinary argument that Congress tied the availability of subsidies to the existence of State-established Exchanges to encourage States to establish their own Exchanges. This claim is nonsense, made up out of whole cloth. There is no credible evidence in the record that Congress intended to condition subsidies on whether a State, as opposed to HHS, established the Exchange. [U.S. Court Of Appeals For The D.C. Circuit, 7/22/14, via Media Matters]