Over at Darwin’s Fool, I posted a critique of the Fourth Circuit’s opinion in King v. Burwell. Unlike the D.C. Circuit’s ruling in Halbig v. Burwell, the Fourth Circuit held that the IRS has the authority to issue subsidies in states with federal exchanges, despite the fact that the Patient Protection and Affordable Care Act repeatedly says subsidy recipients must enroll in coverage “through an Exchange established by the State.” I reproduce here my response to a commenter to that post, as his argument parallels those of many others who have been critical of these cases.


My commenter objected that a plain-text reading “must include the entire text of the bill,” which “makes clear that the goal of the bill was to provide health care to all Americans who needed it and could not, at that time get it.” Moreover, “It would be illogical for Congress to establish a national health care system that is based on subsidies and then not include those subsidies in all aspects,” thus “it is entirely reasonable to interpret that one sentence to mean that Congress intended the subsidies for all participants.” My reply:

Sir, I’m afraid you have things exactly backward.


The overall context of the PPACA presents no difficulty for the plaintiffs in King v. Burwell, Halbig v. Burwell, or the other cases challenging subsidies in federal exchanges. The text of the eligibility rules for those subsidies clearly and repeatedly limit eligibility to those who enroll in coverage “through an Exchange established by the State.” There is nothing in the broader context of the statute to suggest that Congress understood the words “established by the State” to have any meaning other than their usual meaning. There isn’t even any statutory language that conflicts with that plain meaning. Jonathan Adler and I addressed (almost) all of these supposed anomalies here.


On the contrary, it is the Obama administration and its supporters for whom both the text and context present difficulties. (We can no longer call them supporters of the PPACA, given how adamantly opposed they are to implementing the law as Congress intended.) The subsidy-eligibility rules are the only place where Congress spoke directly to the question at issue. Those rules flatly contradict the administration’s position. Congress did not throw the phrase “established by the State” around loosely. They referred to exchanges “established by the State” when they meant exchanges established by the states. They referred generically to “an Exchange” when they meant either a state-established or a federal exchange. And they referred to state-established and federally established exchanges separately within a single provision, which shows they saw a difference between the two. Congress also did the exact same thing — withholding subsidies from residents of uncooperative states — in the PPACA’s other massive new entitlement program, the Medicaid expansion.<--break->

I somehow doubt you or anyone who supports the PPACA’s overarching goal would be comfortable with federal courts adopting a rule that a statute’s purpose should trump the precise means Congress chose to advance that purpose. The PATRIOT Act’s ostensible purpose was to protect Americans from terrorism. Should the president be allowed to do whatever advances that goal, even if his actions exceed the limits Congress placed on the powers created by that statute? The purpose of the Religious Freedom Restoration Act is to protect the freedoms of conscience and exercise of religion. Does that mean courts should interpret the RFRA to allow anyone with a religious objection to opt out of not just the PPACA’s individual mandate, but the statute in its entirety? Should courts allow those with religious objections to opt out of paying taxes?


The problem with your method of statutory interpretation is that Congress never legislates with only one purpose in mind. If it did, then the Occupation Safety and Health Act of 1970 would have devoted 100 percent of U.S. GDP, and conscripted every U.S. resident, to the cause of occupational safety and health — for exactly two days, at which point the Clean Air Act of 1970 would have devoted the nation’s entire stock of human, financial, and physical capital to the cause of clean air. When Congress enacted the PPACA, its purposes included subsidizing health insurance, having states establish and operate exchanges, and using the former as an inducement to the latter. Your recommendation that the executive and the judiciary should vitiate the clear, repeated, and uncontradicted terms of the statute in the name of just one of the legislative branch’s purposes would ironically frustrate Congress’ purpose, not advance it.

Lots more on King, Halbig, and other cases challenging those illegal subsidies, etc., here.