Scalia: ‘The Secretary of Health and Human Services Is Not a State’

By Terence P. Jeffrey | June 25, 2015 | 1:25pm EDT
Justice Antonin Scalia (AP Photo/Charles Rex Arbogast)

( - Joined by Justices Samuel Alito and Clarence Thomas, Justice Antonin Scalia wrote a scathing dissent from the Supreme Court’s 6-3 decision issued today which declared that in the Affordable Care Act—aka Obamacare—the word “state” only means “state” sometimes.

Scalia responded that the word “state” does not mean “the secretary of Health and Human Services.”

In the Obamacare law, it specifically stipulates that a person can only receive a federal subsidy for purchasing health insurance if they buy that insurance in an exchange “established by the State”—which the law aimed for state governments to establish.

However, 34 state government declined to do so. So the federal government stepped in, using another provision in the law, and the HHS secretary established federal exchanges in those states.

Thus--according to the petitioners who brought the case of King v. Burwell--the law, as written and passed by Congress and signed by President Obama, did not entitle the citizens in those states which did not have exchanges “established by the state” to get federal subsidies to buy insurance.

But not according to Chief Justice Roberts.

“If the statutory language is plain, we must enforce it according to its terms,” Roberts wrote in his majority opinion.

But then he went on to say: “The Affordable Care Act contains more than a few examples of inartful drafting.”

Roberts thus concluded that, in the Affordable Care Act, the word “state” did not always mean “state”—it only meant “state” sometimes--and that exchanges established by the secretary of Health and Human Services could be treated as if they were established by a “state”—even though they were not.

In his dissent, Scalia succinctly concluded: “The Secretary of Health and Human Services is not a State.”

Here is a key excerpt from Scalia's argument:

The Court holds that when the Patient Protection and Affordable Care Act says “Exchange established by the State” it means “Exchange established by the State or the Federal Government.” That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.

The Patient Protection and Affordable Care Act makes major reforms to the American health-insurance market. It provides, among other things, that every State “shall . . . establish an American Health Benefit Exchange”—a marketplace where people can shop for health-insurance plans. 42 U. S. C. §18031(b)(1). And it provides that if a State does not comply with this instruction, the Secretary of Health and Human Services must “establish and oper­ate such Exchange within the State.” §18041(c)(1). A separate part of the Act—housed in §36B of the Inter­nal Revenue Code—grants “premium tax credits” to subsi­dize certain purchases of health insurance made on Ex­changes. The tax credit consists of “premium assistance amounts” for “coverage months.” 26 U. S. C. §36B(b)(1). An individual has a coverage month only when he is cov­ered by an insurance plan “that was enrolled in through an Exchange established by the State under [§18031].” §36B(c)(2)(A). And the law ties the size of the premium assistance amount to the premiums for health plans which cover the individual “and which were enrolled in through an Exchange established by the State under [§18031].” §36B(b)(2)(A). The premium assistance amount further depends on the cost of certain other insurance plans “of­fered through the same Exchange.” §36B(b)(3)(B)(i).

This case requires us to decide whether someone who buys insurance on an Exchange established by the Secre­tary gets tax credits. You would think the answer would be obvious—so obvious there would hardly be a need for the Supreme Court to hear a case about it.

In order to receive any money under §36B, an individual must enroll in an insurance plan through an “Exchange established by the State.” The Secretary of Health and Human Services is not a State. So an Exchange established by the Secre­tary is not an Exchange established by the State—which means people who buy health insurance through such an Exchange get no money under §36B.

Words no longer have meaning if an Exchange that is not established by a State is “established by the State.”

It is hard to come up with a clearer way to limit tax credits to state Exchanges than to use the words “established by the State.” And it is hard to come up with a reason to include the words “by the State” other than the purpose of limiting credits to state Exchanges. “[T]he plain, obvious, and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover.” Lynch v. Alworth-Stephens Co., 267 U. S. 364, 370 (1925) (internalquotation marks omitted).

Under all the usual rules of interpretation, in short, the Government should lose this case. But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.

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