In King v. Burwell, the Challengers Find Their Inner Bill Clinton

It depends on what the meaning of the word “such” is. — Bill Clinton (maybe, if he were a lawyer in King v. Burwell)


The word “such” is having its fifteen minutes of fame with the recent PPACA litigation. Much of the government’s narrow textual argument hinges on the word “such”: Yes, section 1401 makes subsidies available on an exchange “established by the State.” But in the absence of a state exchange, section 1321 provides for the federal government to establish “such Exchange.” That “such” (along with numerous other contextual and structural indicators) means that the federal exchange is the functional equivalent of a state exchange when state exchanges are referenced elsewhere in the statute, including in section 1401.

The challengers call this argument “preposterous.” (They say that right in a heading on page 22!) But by rejecting the government’s argument, the challengers run into their own problems when faced with the PPACA’s definition of a “qualified individual” eligible to enroll in an exchange. To get around this problem, the litigants invoke the quite unconvincing “Air Bud” method of statutory interpretation.

But the masterminds behind these challenges—Jonathan Adler and Michael Cannon—go a different route in their amicus brief. They know better than to adopt the “Air Bud” canon. Instead, they do this:


See what they did there? When the meaning and function of the federal exchanges is being discussed in connection with the section 1321 creation of federal exchanges and the section 1401 provisions for subsidies, the word “such” does not create a functional equivalence between state exchanges and federal exchanges.

But when the contextual hurdle of “qualified individuals” needs clearing, “such” becomes a powerful word. The requirements for enrollment that appear limited to state exchanges are brushed aside because section 1321 provides for federal exchanges to have “such” requirements. The strength of “such” ebbs and flows, depending on whether it supports or conflicts with the chosen interpretation. This is the essence of statutory isolationism. Is there a benefit that accrues to individuals on state exchanges? Then “such” can’t make that benefit available on federal exchanges. But is there a burden? Then “such” does the job.


3 thoughts on “In King v. Burwell, the Challengers Find Their Inner Bill Clinton

  1. I think that their brief leaves out the MOST important piece of information regarding qualified individuals. They argue that Congress, in 1311, 1312, and 1313, are “speaking to the states” and thus, these sections do not apply to the federally-facilitated 1321 exchanges. However, it states in 1312(f)(1) “Qualified Individuals – In this title: “. Thus, Congress clearly specified that the requirements for qualified individuals be applied to all exchanges created within Title I which would include 1321.

    The other real problem I have with this argument about the scope of 1311, 1312, and 1313 is that it completely ignores the statutory language and structure which is targeted completely at Exchanges themselves, not just to the States who create them. This is supported by the fact that Exchange is defined as “an Exchange established under Section 1311”. This is also supported when looking at the Section Titles which are not labeled “State Exchanges” and “Federal Exchanges” but instead are labeled “Affordable choices of health benefit plans” and “State flexibility in operation and enforcement of Exchanges and related requirements”. Technically speaking, the terms “federal exchange” or “HHS established exchange” are never used within the entirety of the Act. There is no reference to HHS establishing “an” Exchange, its “such” Exchange. Only under the Halbig interpretation do the requirements, functioning, and general ideas of state established and federally-facilitated exchanges diverge in such materially significant ways.

    This is also supported by the terminology used in Section 1401, 1402, and 1411.
    Subpart A – Premium Tax Credits and Cost-Sharing Reductions
    1401 – Refundable tax credit providing premium assistance for coverage under a QUALIFIED HEALTH PLAN
    1402 – Reduced cost-sharing for individuals enrolling in QUALIFIED HEALTH PLANS
    Subpart B – ELIGIBILITY determinations
    1411 – Procedures for determining ELIGIBILITY for Exchange participation, premium tax credits and reduced cost sharing, and individual responsibility exemptions.

    Now, logic would tell us that if Congress were talking about “Eligibility” requirements for receiving a tax credit. They would have put such a thing in the ELIGIBILITY section and not in the calculation of the tax credit section. Also, if this were such a prominent feature and intended, why is the tax credit language used in connection with QHPs instead of with Exchanges? There is and has always been the understanding that tax credits would be available to ALL QHPs enrolled through Exchanges and unavailable when unconnected to an Exchange.

    Further, I find the “negative” aspect of their argument even worse than the “positive” aspect. By negative aspect, I am talking about their explanation of federally-facilitated exchanges. Specifically, how they work, what requirements they are subjected to, and who may seek coverage within them? If someone is arguing that the statute clearly and unambiguously withholds tax credits from federally-facilitated Exchanges, it would seem like an easy task to show the statutory language that supports this position. However, the only support that I have seen them provide is that federally-facilitated Exchanges are not included in the language in 1401. This does not seem persuasive to me considering that federally-facilitated Exchanges are not included by name in ANY other section of the ACA (outside of the 1401 Information Requirements), and even in that mention in 1401, the language is actually clarifying that “Each Exchange” is understood to include both types of Exchanges.

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

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