Halbig, Statutory Interpretation, and Lessons I Learned in Practice

Reading all the interweb debates in the wake of Halbig and King, I’ve grown increasingly frustrated. People seem to be talking past each other—perhaps for the reasons Will Baude outlines here. Arguments about statutory text are rebutted with arguments about congressional intent, which is often gleaned from press coverage during the ACA’s legislative debates.

But I think it cuts deeper than that. The nature of the post-Halbig debate feeds into the core stereotypes and motive-impugning assumptions that legal conservatives and liberals have about each other. Conservatives willingly play the role of hyper-technical textual literalists with simple-sounding (and superficially appealing!) arguments tailor-made for Twitter: “state” means “state”; it doesn’t mean “federal.”[1] Liberals, on the other hand, ease naturally into the opposite stereotype, countering this plain-language reading of the statute with arguments that could be caricatured as: “I was reading The New York Times daily coverage of the ACA debates and they didn’t mention any of this, so it can’t be what Congress actually meant.”[2]

I’ve come away with two observations, both of them focused on the liberal side of the argument. The first is that we liberals should listen to my former boss Susan Brune. The second is that if we want to preach to anyone other than the converted, we need to focus on the ethos of our rhetoric in the arena of statutory interpretation.[3]

But first, Susan Brune. After clerking, my first job as a practicing lawyer was with Brune & Richard in New York City. (It was a great firm; I miss working and not working with my former colleagues there.) Early on, I was drafting some sort of persuasive brief for Susan, and I included some standard line you see in a lot of briefs, something like this:

The government provides no evidence linking Mr. Defendant to the transaction here at issue.

She hated it. Why? Because I said “no evidence.” That was wrong for two reasons. First, to win the motion we didn’t need to establish that there was no evidence against our client; we just needed to establish that the evidence was insufficient under whatever the relevant standard was. Second, there is always evidence against your client—it might be weak, it might be circumstantial, it might be based on a chain of inferences, but it’s always there.

When you say “no evidence” you’ve therefore set yourself up for a disaster. The other side is surely going to respond with something like this:

The Defendant claims there is “no evidence” tying him to the transaction. But the record is replete with evidence connecting him. First, the Defendant’s then-girlfriend had access to the relevant account . . . .

And so on and so on. You then wind up fighting about picayune details like your client’s girlfriend’s access to the account or whatever little specks the other side digs up. And because you started with a “no evidence” claim now you’re on the defensive. You’ve lost credibility. You told the Judge that you should win because there was no evidence. But now there is some (weak) evidence! Does that mean you should lose? Ugh.

The liberal critics of the Halbig decision have fallen into this trap not once, but twice. First, folks started by saying that the decision (or the challengers’ arguments) were “absurd!” In matters of statutory interpretation, “absurd” has a special meaning. A law isn’t absurd just because you don’t think that’s what the legislature intended. The law must be objectively absurd! For example, a statute that makes it a crime to block the delivery of the mail should not be applied to a sheriff who arrests an on-duty mailman.[4] In other words, there’s just no way any Congress could ever possibly mean to literally apply the statute in this way!

The claim of absurdity in Halbig was easily rebutted by conservative scholars who pointed out that in numerous other instances, Congress had done precisely what the critics were calling “absurd” in this case: Congress had conditioned benefits for a state’s citizens on the state’s agreement to go along with some sort of congressional plan. If Congress had set up precisely this sort of system of sticks and carrots before, then it can’t be “absurd” to say that’s what Congress was doing here.

Of course, liberals had a reply: But that’s not what Congress meant to do this time. At this point, however, we are already down the rabbit hole, arguing about whether something is really absurd and whether it really was so ridiculous to think Congress might have wanted to set up such a system here. That argument, however, is a far cry from the argument liberals should be having: What on earth does the statute actually say and how does it work in context? Just like the “no evidence” claim, we’re now off track and we’re on the defensive.

A similar thing happened with arguments about congressional intent. Yes, the vast majority of contemporaneous analysis and coverage of the ACA drafting and debates assumed that state citizens enrolled under federal exchanges would be eligible for tax subsidies under the ACA. Nicholas Bagley has a nice summary here. But that’s not really the argument liberals were making in the wake of the Halbig decision. Nope. Instead, what I heard was a lot of “no evidence” claims—a lot of articles along the lines of “Nobody with any knowledge of the ACA who was paying any attention or was in any way involved during the drafting of this legislation ever even considered that the subsidies wouldn’t apply to citizens of states with federal exchanges.”

You know what happened next. Folks found two clips of a person intimately involved with the legislation saying that exact thing. And now, because liberals led with the “no evidence” sort of argument, they are left on the defensive while conservatives think they’ve found their silver bullet. Of course the Gruber clips need to be weighed against the greater context, but the “no evidence” argument has been lost. It wasn’t even an argument we should have had in the first place.

So what sorts of arguments should we be making? If we want to actually convince people (and we’ll need to do that as long as there are Republican Presidents and Senators) we should focus a bit on the ethos of our statutory arguments. In rhetoric, you need to have logic on your side, but you also need to connect with your reader, you need to make appeals to credibility, community, virtue, wisdom, goodwill, etc. You need to reach out to the other person and convince them that you actually have something worth listening too.

Far too often (at least in my opinion) the anti-Halbig arguments treat the statutory text like a stumbling block, as if the goal were simply to make a plausible case for ambiguity so the problematic text can be side-stepped. And then it’s off into the comfortable land of intent and purpose. That’s not to say the arguments wholly ignore the text, or that there is no real engagement with the text. But the ethos of these arguments drives toward the author’s understanding of the general statutory purpose, with the text just a hurdle in the way.

Here are a couple of examples, but really, they are meant to be generally illustrative:

In an article for the National Law Journal, Erwin Chemerinsky and Samuel Kleiner begin as follows:

Conservatives fiercely oppose the Patient Protection and Affordable Care Act, and so it is not surprising that two conservative judges on the U.S. Court of Appeals for the D.C. Circuit handed down a decision that would gut the law.

That’s certainly not going to gain you any converts. But how does the legal analysis start?

The Affordable Care Act was intended to ensure that almost all Americans have health care coverage.

No text. No statutory language. Just right to congressional intent. And not even intent with respect to the meaning of the phrase, but a general overarching purpose. The ethos of this argument is loud and clear: “Text schmext. I know what the law really means.”

And here’s Andrew Koppelman in the New Republic, after setting out the Halbig plaintiffs’ general claim:

This reading of the statute makes no sense. Courts don’t read provisions in isolation. Here are a couple of boring, standard rules of statutory interpretation: don’t take phrases out of context; try to make sense of the law as a whole. The ACA’s purpose was universal coverage.

The relevant “context,” apparently, is the general purpose of the statute, not the text of related provisions. If that’s the case, then why not interpret “carrying out 1 or more responsibilities of an Exchange” to mean “YOU MUST ALL BUY HEALTH INSURANCE OR YOU WILL BE IMPRISONED!!!”

I kid, I kid. The thing is, I agree with most of the arguments made in the articles I just quoted; I just don’t think they are the main arguments we should be making. Unless the intended responses are (1) people we already agree with patting us on the back or (2) people we disagree with howling that we’re ignoring the statutory text in a fit of liberal-elites-know-best-ism, then we need to start where all statutory interpretation theory says we should start: with the text of the statute.

And once we start there, we need to stay there for a while. Statutory text is not a weigh station. Almost all forays into statutory interpretation start with some statement along the following lines: “We begin, as we must, we the text of the statute.” Well of course we do. But for those who fear that the text is a flimsy restraint on judges seeking to enact their own policy preferences, the pronouncement to begin with the text has all the limiting power of construction-paper handcuffs. Imagine hearing a wedding vow that said: “Of course, I will begin by being faithful to you.” Yikes.

So to earn some credibility, that ethos, we really need to wrestle with the statutory text a bit. Nicholas Bagley has done a very nice job of this, and others have too. But if we want the discourse of statutory interpretation to move beyond mudslinging, then from a rhetorical perspective we need to view the text as more than just a box to check.

With that said (and goodness, if anyone is still reading) here are a few text-based questions for folks who think this case, as a textual matter, is really just as easy as “state ≠ federal” in the ACA. These are not supposed to be “gotcha” questions; there likely may be easy answers. But I think anyone who says the ACA unambiguously means only state-established exchanges when it uses the phrase “an Exchange established by the State” should have simple and unambiguous answers.

  1. If the term “Exchange” is defined in the statute as “an American Health Benefit Exchange established under section 1311 of the [PPACA],” PPACA § 1562(b) (emphasis added), and if section 1311 only provides for state exchanges (with section 1321 providing for federal exchanges), then does the term “Exchange” standing alone, without modification, mean only state-established exchanges?
  2. Relatedly, if an Exchange is defined as something established under section 1311, how can the Secretary ever create an Exchange as that term is used in the rest of the PPACA?
  3.  If the term “Exchange” is meant to refer inclusively to federal- and state-established exchanges, then what is the effect of the “established under section 1311” language in section 1562(b)?
  4. If the PPACA sets up a two-tiered system for federal- and state-established exchanges, where are the provisions governing exchanges “established under section 1321” or “established by the Secretary under section 1321”? If they are absent, why are they absent?
  5.  If the term “Exchange” is meant to refer generically to federal- and state-established exchanges, with the phrase “Exchange established by the State” reserved solely for state-established exchanges, then why would the PPACA make federal-established exchanges subject to annual audits by the Secretary if the Secretary is the one operating the exchange?
  6. Is a regional exchange operated by a collective of states an “Exchange established by the State under section 1311”? What if one state “established” the Exchange but the other state simply permits the operation of the exchange within its borders, pursuant to section 1311(f)(1)?
  7. What is the difference between an Exchange, an “Exchange established pursuant to this title,” section 1303(a)(1)(D), an “Exchange established under this Act,” section 1312(d)(3)(D)(i), an “Exchange established under section 1311,” see, e.g., section 1331(e)(2), and an “Exchange established by the State under 1311,” section 1401(b)(2)(A)? The PPACA uses all of these differing phrases to refer to exchanges.
  8. Relatedly, could a state establish an exchange pursuant to a section other than section 1311? Could the Secretary establish an exchange pursuant to section 1311? If not, then why say “established by the State pursuant to section 1311”?

On October 30, I was invited to participate in a Cato Institute panel discussion on Halbig, King, and related challenges to the Affordable Care Act. In the wake of the conference, I’ve written a few posts based on the panel discussion. If you’d like to watch the entire law-focused panel, I’ve created a C-SPAN clip here. My thoughts based on the conference are at Part I (Isolationism)Part II (Textualism), Part III (The Whole-Text Canon), Part IV (Halbig’s “Two Exchanges” Problem), and Part V (Creeping Constitutionalism).

[1] For some reason, this simplistic argument has a sort of “It’s Adam and Eve, not Adam and Steve” ridiculousness to it, both in its pith and its irrelevance.

[2] If you read this and you don’t think it applies to whatever article you’re thinking about, then just assume I’m not talking about that article.

[3] I’m terrible at writing catchy ledes that make people want to keep reading. And I really need an editor. Sorry.

[4] Thanks to Veronica M. Doughterty, Absurdity and the Limits of Literalism: Defining the Absurd Result Principle in Statutory Interpretation, 44 Am. U.L. Rev. 127, 137-38 (1994), for providing me with this example case: Kirby v. United States, 74 U.S. 482 (1868).

 

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23 thoughts on “Halbig, Statutory Interpretation, and Lessons I Learned in Practice

  1. Pingback: TPM’s Halbig/PPACA “BOOM” Goes Boom | Ziff Blog

  2. Pingback: Josh Marshall & TPM Promise a “BOOM,” Deliver A Dud | Irascible Musings

  3. I’d like to draw attention to the fact that we as a country are in this position–fighting in court over a poorly drafted monstrosity–because the Democrats chose to use dirty tricks (sorry if that phrase offends but it’s the best I can do this morning) to pass the law. Instead of following the historical precedent and common-sense path of getting buy-in from both sides on society-reshaping legislation affecting 1/5 of our economy–Democrats pushed it through with a razor-thin margin via reconciliation and ‘deeming it passed’. Not only did that leave us with a badly written law, but it also left the people who insisted on ramming it through with no option to amend it once their mistakes came to light.

    Think about it, if the reform had been agreed to by a sizable majority, as any legislation of this importance should, then problems like this one could be easily amended through corrective legislation. But we had no such agreement and the GOP is not inclined to help Democrats fix/save their mess, so Democrats want/need the Obama administration to bail them out with delays and such, or the bureaucracy via interpretive rules, and finally the courts to twist and contort to save their baby (cf. tax but not a tax, State means what we say it means). And now thanks to this fiasco we have, inter alia, the Supreme Court on record that the federal government can compel citizens (illegals probably come out better on this one…) to do pretty much any arbitrary thing so long as they call it a tax (or don’t call it one but secretly make it one, but not really??? Help me out here, John!)

    Maybe everyone, Republicans included, can learn a lesson in this: important legislation should at the very least have broad acceptance, if not broad support. And Dems, if you couldn’t get that for your transformative health care legislation in the midst of a financial crisis, then you should have compromised further to get more Republican support, and if that were not possible, or simply a bridge too far for you, then the time was not right. Our system is designed to frustrate those who would make bold changes without wide support. The PPACA saga has been an object lesson thereof. The fierce urgency of now doesn’t necessarily mean, ‘we need to pass this bill no matter what!’ We have come to this pass not because Republicans are obstructionist but because Democrats insisted on passing legislation that many people greatly disagree with.

    If not enough people agree with you, continue the argument. (I know I know conservatives think leftists are generally good people with good intentions who are somewhat misguided; whereas leftists think conservatives are evil.). But until you can amend the Constitution that’s the way the system works.

  4. Pingback: Ziff Blog Goes to Washington | Ziff Blog

  5. Pingback: Reflections from Cato: Halbig and the “Isolationist” Theory of Statutory Interpretation | Ziff Blog

  6. Pingback: The Halbig Challengers’ Biggest Textual Obstacle: Cato Reflections Part IV | Ziff Blog

  7. Pingback: More on ObamaCare / Halbig / King | Greg's Weblog

  8. Just saw this. I’ve responded on my blog, but I’ll also respond here.
    I’d like to start by saying I really appreciate your posts. You haven’t changed my mind on Halbig, but you have made me think, and I really appreciate that.

    I’m going to skip your first three questions, because no answer to them affects my argument.

    4: They are absent because the only difference between the two types of exchanges is the subsidies, and that’s fully taken care of by the language creating the subsidies.

    5: IIRC, the audit language requires a number of reports about who’s getting insurance, etc. Information needed by the IRS (when enforcing the Individual Mandate) regardless of where the insurance comes from, or whether or not the individual is getting subsidies.

    6: I would say that because of the poor writing of the ACA, in neither of those cases would someone be eligible for a subsidy.

    7: I don’t know, ask the people who wrote the ACA. What I do know is that an Exchange established by the Federal Government is, by definition, not an Exchange established by a State. And I know know that the ACA established that an Exchange set up by a Territory “shall be treated as a State for purposes of such part”. No such language exists for the Federal Exchanges.

    8: A: A State could have set up a health insurance Exchange 10 years ago (not under a different Section of the ACA, but simply based on its own inherent police powers, and power to regulate health insurance). What would have stopped a State from doing that? B: I say no, the Halbig Court says Yes.. C: Because they wanted to limit subsidies to Exchanges that were 1: Not set up by the Federal Government and 2: Followed the rules of the ACA. Which is the point of King and Halbig.

    Now, I have three questions for you (or any other anti-Halbig individual):

    1: The ACA says that an Exchange set up by Washington DC shall be treated as an Exchange set up by a State. It says that Exchanges set up by any of the Territories shall be treated the same way. Is there a fifth type of Exchange? Or is the only other type of Exchange one set up by the Federal Government?

    2: Why was the phrase “an Exchange established by the State under section 1311” used in the ACA, when, under your interpretation, what was meant was “an Exchange”? I don’t have the reference to hand, but I know there’s a Supreme Court precedent to the point that we must assume that Congress put words into a statue for a reason, and an interpretation that makes words superfluous is inherently inferior to one that does not. Does your argument not suffer from that fatal flaw?

    3: Have you read the Halbig majority opinion? Have you put together a point by point refutation of it? If so, where is it? If not, would it not behoove you to do so? Wouldn’t that be a far more productive use of your time than arguing with a bunch of bloggers?

    Because if you can’t take it down (and I don’t believe you can), you’d better resign yourself to losing in the Supreme Court.

    • Thanks Greg, both for the close read and the kind words. A brief response to your points:

      For my #1-#3 (which are irrelevant to your points) and #4 and #5, my point is summed up here: http://ziffblog.wordpress.com/2014/11/05/halbig-and-the-whole-text-canon-cato-reflections-part-iii/ I recognize that there are specific answers to those questions, because the challengers are smart and they know how to parse a statute. My point is that looking at those provisions and the design of the statute as a whole, the better read is that each description of “Exchange” does not bear the weight of the precise implications that the challengers put on those modifiers, with each one having a specific meaning. It’s evidence that the ACA is more like the example in the post above, from the Federal Rules of Civil Procedure. Different drafters writing different sections at different times, and using different words to refer to the same thing, without intending fine-grained differences.

      For #6, you’re the first person to give that answer, and I think it cuts against the challengers “incentive” argument. Why incentivize states to *not* form a regional exchange? More structural evidence of the government’s position.

      For #7, the meaningless distinctions again supports the reading discussed in #1-#5 above. It’s like the FRCP example. I can’t ask the drafters (since I’m just focusing on text), but the clear signal is: “We didn’t put as much weight on the individual descriptions of “Exchange” as the challengers would have it.”

      For #8, perhaps, but that would be an exchange, not an Exchange, which is a defined term under the statute and is limited to section 1311 exchanges. Your answer “B” is an interesting debate within the challengers, and given that the definition of Exchange includes a 1311 limitation, I think it’s a tough one for that side.

      Now for your questions to me!

      Q1: There are regional exchanges, which you discussed above. Those would be 1311 exchanges but not established by “THE” state. And note from my entries on the text and context (in which I agree with the Halbig en banc government position) the federal government is not a “State.” Rather, the federal Exchanges are the functional equivalent of state exchanges. The reason the definition of State needs to include territories is because there is no section 1321 for territories, so unless they are defined as a State there is no Exchange for them.

      Q2: You’re 100% right that “established by the state” would violate what you’re referring to as the “rule against superfluities.” But these the problem with treating these canons as “rules” or a “fatal flaw” is that the Court doesn’t treat them that way. They are guides. And they apply unless, in context, they don’t. (I am at home for the weekend so I don’t have my texts with me, but rest assured there are plenty of Scalia quotes and other SCOTUS quotes to support that.) One of the critical points of all the examples where the ACA refers to Exchanges in myriad ways, is that the ACA seems not too concerned with consistency or superfluous language. The section 1311 example is critical there. Exchange is defined as “under section 1311″ and then the ACA elsewhere talks about “Exchange under 1311.” What is that if not superfluous? Again, this brings us to the Federal Rules of Civil Procedure example. The close parsing of the language just doesn’t bear the weight.

      Q3: Come on. You *know* I’ve read the Halbig opinion! And I think I have put forth a point-by-point refutation of it in my series of posts. The main issue I have is this: http://ziffblog.wordpress.com/2014/11/03/reflections-from-cato-halbig-and-the-isolationist-theory-of-statutory-interpretation/ While I agree that the Halbig court an the challengers have a “response” to all my points and all the questions, on the whole I find their responses flimsy for the reasons outlined in my posts. Everyone on both sides agrees this statute could have been written more clearly. If it was meant to be a Medicaid-like “threat/incentive” then it could have been written clearly like Medicaid. If it was (as I argue) a functional federal fallback then it could have more clearly/consistently referred to Exchanges using plain common sense language. But the statute did neither of those things. So we’re left trying to figure out the *best* reading of the statute. I think the Halbig panel opinion puts too much weight on one phrase at a cost to the context/structure of the statute as a whole, which I explain in that series of posts.

      As for productive uses of my time, this is *much* more productive than what I would be doing otherwise, which is likely watching football or wandering down to the Ballard Locks to look for seals.

      -DZ

      • Hi David,

        I phrased my question 3 poorly (which I realized last night as I was laying in bed). Let me try again:

        3: The main argument I’ve seen of the King majority, the Halbig dissent, and all the bloggers and commentators out here (other than you) is that the Halbig position is wrong because it will hurt ObamaCare, or because the people bringing it are anti-ObamaCare, not because the law is against Halbig. I’m just wondering if anyone has addressed Halbig leaving all that illegitimate BS aside. The only posts of yours I’ve read are the ones I’ve commented on. Now that the elections are over and King’s been granted cert, I can move my focus back to this. So, got some links to point me to? :-)

        For example, the claim that 1311(d)(1) is definitional, and thus it defines the Federal Exchange as an Exchange created by a State.. IMHO the Halbig court destroyed that argument. Do you have a counter?

        Now for question 6 I’ve changed my mind on this one. Let’s go back to the text of the ACA:

        (A) IN GENERAL.—The term ‘coverage month’ means, with respect to an applicable taxpayer, any month if—

        (i) as of the first day of such month the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act,

        In this text “the State” refers to the Exchange, not to the taxpayer. It is not the taxpayer’s State we’re worried about, but the State that set up the Exchange. A regional Exchange is still an Exchange set up by the States, not by the Federal Government. As it is an Exchange set up by the State the individual lives in, the individual would be eligible for subsidies. (The requirement is not set up only by the State, just set up by the State.) The shared Exchange is an Exchange set up by the State that set it up, not by the Federal Government. So, again, the person purchasing insurance on that Exchange is eligible for subsidies.

        Nothing in the ACA says that the Exchange has to be set up by only the State, or by the State the individual lives in. So neither is an impediment to a subsidy.

        For your responses 1 and 2 (and for 1 – 5 and 7 of your original questions).
        1: We are not looking at it just in isolation. There are four types of Exchanges: ones set up by a State, one set up by DC, ones set up by Territories, ones set up by the Federal Government. For types two and three, the ACA is very careful to specify that those Exchanges act as Exchanges set up by a State. It does not just do this in 1411, were the subsidies are defined, it does this elsewhere in the text.
        And it never, ever, says anything like that about Federal Exchanges.
        Now, did the drafters of the ACA refer to Exchanges in multiple ways? Yes. Does 1562(b) make “Exchange” a synonym for “Exchange established under section 1311 of the Patient Protection and Affordable Care Act”? Yes, it does. But teh drafters were very careful to only use “Exchange established by the State” when referring to non-Federal Exchanges:

        I’ve looked through the ACA, to find every place it refers to Exchanges created “by the State”. The phrase “by the State” is found on 63 pages of the Certified ACA:

        Page 403 – 404 of the Certified ACA
        (gg) MAINTENANCE OF EFFORT.—
        (1) GENERAL REQUIREMENT TO MAINTAIN ELIGIBILITY STANDARDS UNTIL STATE EXCHANGE IS FULLY OPERATIONAL.
        Subject to the succeeding paragraphs of this subsection, during the period that begins on the date of enactment of the Patient Protection and Affordable Care Act and ends on the date on which the Secretary determines that an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act is fully operational, as a condition for receiving any Federal payments under section 1903(a) for calendar quarters occurring during such period, a State shall not have in effect eligibility standards, methodologies, or procedures under the State plan under this title or under any waiver of such plan that is in effect during that period, that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under the plan or waiver that are in effect on the date of enactment of the Patient Protection and Affordable Care Act.

        This clearly defines “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act” as being different from the Federal Exchange it’s replacing

        Page 2154 of the Certified ACA
        (C) CERTIFICATION OF COMPARABILITY OF PEDIATRIC COVERAGE OFFERED BY QUALIFIED HEALTH PLANS.—
        With respect to each State, the Secretary, not later than April 1, 2015, shall review the benefits offered for children and the cost-sharing imposed with respect to such benefits by qualified health plans offered through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act

        This specifies that “qualified health plans offered through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act” are subject to review by the Secretary to make sure that they meet the Federal standards. This distinguishes from plans set up under a Federal Exchange, where one assumes the Secretary would not allow then into the Exchange unless they met the Federal standards.

        All of the rest of the uses of “by the State” connected to “Exchanges” are in the section on CHIP. In no place is there ever any equivalency created between “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act”, and a Federal “Exchange”.

        If we are to believe that Congress was using the offer of ACA subsidies to get States to set up their own Exchanges, I can see no grounds for saying “but they wouldn’t hold children hostage!” Since, after all, they are holding hostage all the children of people who don’t qualify for CHIP.

  9. David, another question for you: In the history of attempts by the Federal Government to extort State action via the threat of withholding funds, was there any time before 2010 where a State did not fold?
    I know that every State had a 55 MPH speed limit, and that every State raised the drinking age to 21, when the Feds used that tactic.
    So it seems utterly reasonable that the drafters of the ACA assumed that every single State would roll over for the threat of withholding subsidies. As such, the CHIP sections simply show that the drafters were so certain they held the whip hand, that it never even occurred to them that a State might refuse to set up an Exchange. Just as they were positive (and said so, publicly, repeatedly) that once the ACA was passed people would grow to like it. Or that once it was implemented people would grow to like it.

    Their failure of imagination does not entitle them to a do over. They wrote the law assuming everything would go their way. They were wrong. Now everyone gets to live with their many failures.

    Given that to get to 60 votes, they had to appease a Senator who demanded that State Exchanges, not a Federal Exchange, be the centerpiece of the law, and that the only way they could get States to set up Exchanges was to convince the States to do it, what reading of the statute could possible be more reasonable than the one that says that the drafters used teh time honored, and previously always successful, technique of saying “here’s this money, do what we want or you don’t get it”?

  10. Greg, you’ve asked for links, and I think I’ve addressed a lot of these points in these posts: http://ziffblog.wordpress.com/tag/halbig/ On the point about the “Threat” I think if you assume it’s a threat, then you’re argument works. But the critical issue is first determining *if* it’s a threat, or if instead it was a system of choice like the Clean Air Act. I address some of that here: http://ziffblog.wordpress.com/2014/11/06/the-halbig-challengers-biggest-textual-obstacle-cato-reflections-part-iv/

    • I responded there, but I’ll bring one point here: Why would a State expend the serious resources required to set up a State Exchange, if the Sate Exchanges did not bring the benefit of subsidies? What other benefits do States get from setting up Exchanges?

      • Why don’t you ask all the states that did actually set up an exchange? None of them believed that that was the only way to get subsidies, so they had other reasons.

      • So you’re saying there’s no real reason in the law to set up an Exchagne, other than to get the subsidies?

  11. Pingback: A Walk Through Halbig, King, and the ACA Litigation | Ziff Blog

  12. Hi David,

    On further thought, I think your questions don’t do what you claim they do, and in fact undercut your argument.

    1: We know that all 2000+ pages of the ACA were not written by the same person, or the same group. So the fat that Exchanges are called multiple things is neither surprising, nor particularly relevant in and of itself.

    2: What is relevant is “how is the phrase ‘an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act’ used in the ACA?” And as I researched and reported above, it’s used to describe a State Exchange, as opposed to a Federal one.

    3: What is also relevant is how subsidies are referred to. And both times in the ACA that the subsidies come up, they go to plans purchased on “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act”.

    It’s not tunnel vision, it’s not narrow focus, it’s looking at the entire ACA. And the entire ACA is written on the assumption that essentially every State will set up Exchanges, and that any State doesn’t will deny its citizens the ObamaCare subsidies.

    Lacking any place where subsidies are explicitly directed to plans purchased on a Federal Exchange (which we know you don’t have), and lacking any place where “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act” refers to a Federal Exchange (and I searched the entire ACA for “by the State” without finding anything), you’re just out of luck.

    It will be 5-4, but King will be overruled.

  13. I have read through your various communications back and forth here, and while the academic and scholarly work clearly comes through, what remains lost in the minutiae of analysis is that millions of Americans who could not afford or access health care now are able to do so, with ACA’s subsidies. After all, isn’t health care a right for us all, not in a constitutional sense, but as a moral imperative provided by government where the private market has been inept in doing so for so long? Again, without health care, none of us can do anything, and the health of each one of us is just as important as the health to the other of us. ACA was a legislative best effort, although not written well, but, after all, that is the state of the human condition when it comes to legislative efforts in drafting and passing into law thousands of pages. Let’s take a means-ends test, with identifying the “ends” first, and then work backward to achieve a goal consistent with millions of Americans who now have health coverage that, but for ACA and its subsidies, would never have had it before. Thanks for listening.

    • Thanks for the comment Miles. I’m with you on the big picture. My project here, however, is much more modest. The current litigation challenges to the ACA are not based on moral imperatives or an “ends”-focused analysis. Sure, the challengers have an “end”—the destruction of the ACA. And they have different moral imperatives driving them (i.e., general rule-of-law concerns, desire for limited government, escape from a mandate, etc.).

      So while the broader healthcare fight will be waged on the terms you’ve outlined, the courts are dealing with this particular statutory challenge on more narrow terms. Some judges might resolve this case based on broader moral factors. But I doubt anything I write here or that the government puts in a brief will persuade those judges, on either side.

      There are, however, a good many judges in the middle, who despite predispositions and biases (I use that term neutrally) will decide this case as a statutory interpretation case. And some of those may have a conservative/textualist bent. They may not like the ACA. But I think these arguments are good arguments because (1) I think this is how statutory interpretation *should* be done and (2) I think this is how we can convince more conservative judges to rule for the government in this case.

      • Does anyone know if there is ample legislative history regarding the Medicaid opt-out? I don’t really care for legislative history-I find it tedious but I think it might be relevant in the Halbig/King issue. If there is abundance of debate concerning State Medicaid opt-out then it becomes clear that at least it was not congress’

      • Sorry got cut off there. If there is ample evidence of debate concerning the State Medicaid opt-out then it becomes clear that it was not congress’ intent to limit subsidies to only State Exchanges. This is because there is no legislative history concerning Halbig/King yet using the Halbig majority interpretation in other provisions would clearly cut off Medicaid to Federal Exchanges giving the same effect as Medicaid opt-out.

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