In the days just before the March 4 Supreme Court hearing in King v. Burwell, I got a number of calls from total strangers who had read about the case and who wanted to be plaintiffs in it. I explained to them that it was too late to join the case then, but listened to their stories of cancelled insurance policies and jobs jeopardized by Obamacare. One call stood out in particular. It was from a woman in California who had moved to the U.S. years ago from the Ukrainian city of Donetsk. After explaining her health care predicament, she asked me: Do you understand how crazy this is? I left a totally dysfunctional country to come here, and now I find myself trapped in this insanity!
That’s an interesting contrast to the disaster stories that we’ve been hearing for months, about what will happen if the Supreme Court rules in our favor in King. At issue in the case is an IRS rule that provides nationwide health insurance subsidies. The question for the Court is whether that rule is legal, since the underlying statute authorizes subsidies only in those states that set up their own health insurance exchanges—something only 14 states have done. We argue that the IRS rule is contrary to the clear language of the law Congress enacted. The government argues that invalidating the rule will frustrate Congress’s alleged purpose of making health care available to everyone.
This is where the disaster stories come in—about how, without nationwide subsidies, millions of people will be left uninsured and without medical treatment. But the Obamacare insurance subsidies aren’t some long-established fixture of medical care; they only took effect in 2014. And for several years before then Obamacare was delayed by purely political decisions made by the White House. Where were the cries of disaster back then? There weren’t any, in large part because we had a sizable array of medical entitlements aimed at preventing such disasters. We still have them. To the extent that state or federal fixes are necessary to ease transition problems that might be caused by a court ruling, nothing would stand in their way. States that chose not to set up exchanges could, for example, change their mind.
One thing the disaster stories leave out is the fact that, for millions of Americans, Obamacare itself has been a disaster. These victims of Obamacare—yes, victims—include people who, like the woman from Donetsk, can no longer buy low-priced catastrophic insurance, or who find that the cost of their current policies have increased steeply, or who can’t keep their doctors. They include workers pushed into part-time status by companies trying to avoid Obamacare’s dictates, and companies that shelve their expansion plans due to its regulatory burdens. They include the taxpayers who foot the bill.
And there’s one last victim here—the rule of law. Under the Constitution’s separation of powers, Congress enacts laws and the Executive Branch implements them. But what the IRS has done in creating its subsidy rule isn’t implementation; it’s rewriting the law, plain and simple.
To defend that rewriting, the government has resorted to a set of arguments that twist the plain language of the Obamacare statute into what the government’s lawyers claim is a “term of art”—a phrase whose meaning is known only by some inner circle of experts. For example, consider the phrase “exchange established by the state.” Those are the words
Congress used to designate the insurance exchanges that qualify for subsidies—that is, exchanges set up by the states themselves. The phrase clearly excludes the federal exchanges—those which the U.S. Department of Health and Human Services is directed to set up in states that don’t create their own exchanges.
According to the government’s counsel, this phrase has nothing to do with specifying a type of exchange. Rather, to quote directly from the government’s brief to the Court, the phrase is just a matter of “style and grammar.” Under the administration’s approach, the word “establish” is no longer a verb; it’s an ornament.
If you think this is just a technicality, think about the very first sentence of the Constitution, where the word establish appears not once but twice: “We the People of the United States, in Order to form a more perfect Union, establish Justice … and do ordain and establish this Constitution …” Try applying the government’s semantic approach to that sentence, and what do you get? Gibberish.
If defending the IRS takes us down the path toward constitutional gibberish, that’s a pretty good indicator that its rule should never have seen the light of day in the first place.
This article originally appeared in Competitive Enterprise Institute’s OpenMarket.