The “Serious Constitutional Problem” With The GOP Attempt to Kill Obamacare

This June 27, 2012, file photo shows an American flag in front of the U.S. Supreme Court in Washington. (AP)

This June 27, 2012, file photo shows an American flag in front of the U.S. Supreme Court in Washington. (AP)

This week, the Supreme Court heard the case King v. Burwell, conservatives’ latest challenge to the Affordable Care Act, also known as Obamacare. At issue is the availability of tax subsidies for people who purchase health insurance on a marketplace created by the federal government. The Petitioners – the people bringing the lawsuit  – are attempting to send the Affordable Care Act spinning into a death spiral, by arguing that the subsidies are not available to people who buy their health insurance on the federal exchange, because the law states that the subsidies are only available to people who buy their insurance on an exchange “established by the State.” Now, you might recall that many states chose not to develop their own exchanges. Instead, people in those states purchase their insurance on the federal exchange. As such, the U.S. government (the Respondent) has countered by arguing that because the federal government stands in the shoes of the states that choose not to establish their own exchanges, the subsidies are available to everyone. The stakes are high.

But here comes the irony. The Petitioners further argue that Congress wrote the law this way to force the states into establishing their own exchanges if they wanted the subsidies, and to force them into assuming responsibility for the fallout if they failed to do so. It is this argument that sets up the ironic conundrum conservatives have just fallen trap to.

The conundrum starts with the principle of federalism. Federalism in the United States is the constitutional relationship between U.S. state governments and the federal government of the United States. It is the idea that there is a separation of power, a power sharing if you will, between the states and the federal government. And, if I’m not mistaken, it is generally something that conservatives scream and yell about when they invoke “states’ rights” and Tenth Amendment arguments.

Now, on many occasions the Supreme Court has said that the federal government can incentivize the states into doing something using money (like they do with the drinking age – yes, they offer states extra $$$ to keep the drinking age 21, but that’s another story for another day), but the Court has also said that the federal government cannot commandeer the states into doing something by requiring the states to “take title” aka assume liability for the fallout if they fail to comply with a federal directive. (See New York v. U.S.)  In fact, in that case, the Supreme Court held that this type of “you take responsibility” provision was impermissibly coercive and violated the Tenth Amendment.

In simple terms, conservatives are now arguing in favor of an interpretation of the Affordable Care Act that would potentially violate federalism and the Tenth Amendment. How’s that for irony?

If the Court were to adopt the Petitioners’ position (the people trying to kill the law) it could create a huge constitutional problem. Their entire argument against Obamacare is that the federal government used the words “established by the state” in order to coerce the states into setting up exchanges if they wanted the federal money. If this argument were adopted, it would lead to the logical legal conclusion that the federal government is attempting to commandeer the states into setting up exchanges by threatening to withhold their subsidies and therefore would arguably violate the anti-commandeering principle, the principle of federalism, and the constitution. They really didn’t think this all the way through. Even Justice Kennedy – a key vote in this case – called it a “serious constitutional problem” during oral arguments (source).


Notwithstanding, there are actually several other legal doctrines at play here.

1) Standing: The Petitioners have actually benefited from the subsidies. In order to have standing, the petitioners have to be able to prove they are injured by the fact that states without their own exchanges receive subsidies. So the preliminary question is, because the petitioners are benefiting from the subsidies, can they show a cognizable injury such that they would have standing?

2) Constitutional Avoidance: Under this doctrine, the Court is more apt to read laws in a way that avoid further constitution problems. So, the second question is, if the Petitioners’ argument was to be adopted, would it actually create further constitutional problems? As discussed above, that seems likely. It would create the commandeering problem and violate the principle of federalism.

3) Chevron Deference: Pursuant to Chevron v. NRDC, the Court usually defers to the agency in charge of executing the provision when determining what the provisions means. Therefore, if the IRS interprets the words, “established by the state” as meaning the exchanges established by the states themselves (like in NY) and the “exchanges” established by the federal government, while standing in the states shoes, then the subsidies should be available regardless of whether an exchange is established by a state government or the federal government (the IRS has interpreted the law this way). So, the third question is, does Chevron apply? And if it does, then must the Court defer to the IRS interpretation, which says that subsidies are available regardless of whether you bought your insurance through a state exchange or the federal one?

4) Plain Language Interpretation v. 5) Context Interpretation:

These are competing principles. Some justices say we should only look at the words themselves, other justices say we have to look at the words in context of the entire law. So on one hand, you have what the law actually says, “established by the state,” which would militate in favor of the Petitioners’ argument. On the other hand, if you look at the statute as a whole, it is pretty clear that Congress intended the subsidies to flow to anyone who bought insurance on any exchange – this would militate against the Petitioners’ argument. Further, while these two principles compete directly, they also work in tandem with the first three, so you must take them account while looking at how they – a plain language interpretation or a context interpretation – function within the doctrines of standing, avoidance, and Chevron.

With so many doctrines in play, it’s hard to know which way the Court will rule on Obamacare.

All of this over four simple words, and with so much at stake, all of this could have been avoided with proper drafting. The proper wording of the statute should have been, “subsidies are available to anyone who is eligible for them, as long as they buy insurance on an exchange, regardless of whether that exchange is established by a state government or the federal government.”




Ilyssa Fuchs

Ilyssa Fuchs is an attorney, freelance writer, and activist from New York City, who holds both a juris doctor and a political science degree. She is the founder of the popular Facebook page Politically Preposterous and a blog of the same name. Follow Ilyssa on Twitter @IlyssaFuchs, and be sure to check out her archives on Forward Progressives as well!

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  • Pipercat

    Welcome back!

    • Ilyssa

      Thanks. Just a once in a while thing. I’ve been litigating a lot of cases lately and have little time to write for fun. 🙁

  • Jim Bean

    Yeah, the only problem is that there is video footage of Jonathan Gruber speaking for the Noblis Innovation and Collaboration Center explaining very explicitly that the intent and design is to prevent individual states who won’t set up their own exchanges from getting the subsidies.

    Search: > Jonathan Gruber: States Which Do Not Set Up an Exchange Do Not Get Tax Subsidies youtube <

    John Sexton

    • Ilyssa

      It doesn’t matter whether he said that or not, his words are irrelevant under the doctrine of constitutional avoidance and he’s not the one in court making the argument right now, a conservative group is. Things that you think matter don’t always come into play when it comes to the law. The Court won’t even consider his comments as they aren’t on the record.

      • Jim Bean

        So you’d be OK with knowing the court reached the wrong decision because they didn’t have the evidence that you did?

      • Ilyssa

        That happens all the time in law. It’s nothing out of the ordinary. The Supreme Court is an appeals court. They only look at facts that either side has preserved for appellate review. If the people (the conservatives) who are making this argument wanted to include the Gruber video in the record they could have, but they didn’t, so it’s not part of the record. The court cannot legally consider it as evidence.

      • Ilyssa

        Clearly the Petitioners didn’t think it was a piece of evidence they wanted to include in the record or they would have. Plus, even assuming for a second it was in the record, that’s not the end of the inquiry. The intent of the drafters is only one factor. It must be looked at in the context of the 5 other legal factors I listed above.

      • Jim Bean

        So you WOULD be OK with it. As far as I’m concerned, you lack the depth of character necessary to be worthy of being part of our society.

      • Ilyssa

        It has nothing to do with lack of character, it’s just simple appellate procedure. Whether I like it or not is irrelevant. That’s just how it is. During my 1st year of law school one of my professors said, “If you witness drops dead on the stand, you better say, ‘let the record reflect the witness is dead,’ because if you don’t, even though he is dead, on appeal, the court will consider him to be alive in a legal sense and will not necessarily let you use the death exception because you didn’t put it on the record during the initial proceeding.” The point is, if the Petitioners though it was so important to introduce this piece of evidence, they could have and should have. But they did not. So legally it cannot be considered. I deal in legal substance and legal procedure, not in the abstract. But let me tell you, you really have a lot of it considering you need to attack my character for simply explaining how appellate procedure works.

      • Ilyssa

        For further reference. Go look at Rule 10 of the Appellate Rules of Procedure:
        www[dot]uscourts[dot]gov/uscourts/rules/appellate-procedure[dot]pdf

      • BB-Mystic

        Jim, come on. That comment is ridiculous. The law is the law is the law, and “depth of character” has nothing to do with it.

      • Jim Bean

        Says those who stood up to defend Hobby Lobby and Citizens United. The depths of the Left’s hypocrisy is unfathomable.

      • Pipercat

        Do you realize you filleted five red herrings in a row? Honestly Jim, the good counselor wrote an informative piece, is being respectful and patient by answering your fallacies in a thoughtful way; moreover, using a respectful tone. Remarkable for this site as of late, yes? Yet, your irascibility only shows your lack of knowledge of the subject at hand. It also shows how adept you can be at making a fool of yourself.

      • Jim Bean

        Those weren’t red herrings. They were hypocrites – a less desirable species.

      • Ilyssa

        Not everything you think is hypocrisy actually is. Remember, F Scott Fitzgerald once said, “The test of a first-rate intelligence is
        the ability to hold two opposed ideas in mind at the same time and still
        retain the ability to function.”

      • Jim Bean

        What Fitzgerald said does not ‘debunk’ the definition of the word hypocrisy. You know the saying I think is much closer to the mark here? “98% of people truly believe they are a little smarter than everyone else. The true intellectuals, however, are that 2% constantly saying, ‘I’m not sure I know the answer to that, but I could look into it further’ and nobody pays any attention to them.”

      • Pipercat

        Six in a row.

      • BB-Mystic

        Stop moving the goalposts, please. We’re not discussing Citizens United or Hobby Lobby. We’re discussing the fact that you have no business insulting Ilyssa or questioning her character.You also shot your mouth off without knowing what you’re talking about. I think you should apologize for both.

    • Ilyssa

      It’s also does not what Gruber intended. First rule of law school. Things you think matter don’t. Things you don’t think matter do.

      • Jim Bean

        First rule of Liberalism: if forced to choose between the narrative and the evidence that contradicts it, toss the evidence.

      • Ilyssa

        Actually no. The Gruber video is completely irrelevant in the record because it’s not in the record.

      • Ilyssa

        The Supreme Court can only look at things that are part of the record of the case. And FYI, I didn’t write this from any ideological perspective. I just wrote the law. And right now it’s a conservative group that stood up and made this argument.

  • Charles Vincent

    Its good to see an actual article as apposed to the stuff that’s been here Ilyssa Welcome back.

    That being said the primary architect stated that states have to set up and run their own exchanges if the want the subsidies and if they do not their citizens still pay the tax but don’t get the subsidies. This is exactly what King v Burwell is about.

    Re “federal government cannot commandeer the states into doing something by requiring the states to “take title” aka assume liability for the fallout if they fail to comply with a federal directive. (See New York v. U.S.)”

    Shouldnt this have come up in the original ACA SCOTUS case as an issue? I mean clearly they read the law to come to a decision.

    • Ilyssa

      It was never raised as an issue in the original suit so it wasn’t litigated. Further, while Gruber has said that, as discussed above in my comments with Mr. Bean, Grubers comments are largely irrelevant in this suit because they were never entered into evidence so they aren’t part of the record. Secondly, it’s the challengers that adopt that argument, the government maintains that Gruber might have believed that but that Congress did not and Gruber isn’t a Congressperson so it’s not about what he thinks about what he wrote, it’s about what Congress thinks it meant. However even assuming the conservatives had introduced his comments into the record to support their position it would simply be one piece of evidence among hundreds that the Court would consider in determining legislative intent. It wouldn’t make or break the case either way.

      • Charles Vincent

        I know it wasn’t. I read all the comments before posting. It also doesn’t mean that congress doesn’t see it the way Gruber described.

        More importantly it really doesn’t help sway public opinion of it and in the end it causes even more people to dissent against the law. The left has failed to grasp this concept.

        I know that the majority of the left Loves the law. I do not but I do not because I don’t see it solving the problem of High cost healthcare.

        Again welcome back.

      • Ilyssa

        Thanks. Good to be back, albeit my job keeps me very busy litigating hundreds of cases so it’s not going to be a permanent return, almost sort of a guest spot. Anyways, your right, it doesn’t mean Congress didn’t see it that way, but when it comes to appellate procedure, what matters is what the Petitioners and the Respondent (in this case Solicitor Verilli on behalf of the US government i.e. Congress, put on the record as evidence to support their position. The Government is arguing that the law should be read in it’s entire context and that Congress never intended that reading of the law. The Petitioners have countered making your exact argument, that Congress did intend the law to be that way. However, under the doctrine of constitutional avoidance, the court is more apt to decide in favor of the party that puts on an argument which does not lead to further constitutional violations. So in this case, it happens to be the conservative Petitioners who are arguing in favor of a reading that creates further constitutional problems.

        As for your second point, that may be entirely true, his comments may not curry favor in the court of public opinion, but I try to just stick with their impact in the court of law. 🙂

      • Ilyssa

        Oh and to further answer your second question. The Supreme Court only hears issues that are squarely before it. In the 1st case, this issue was not raised, so under appellate procedure the Court couldn’t have entertained it at all. A second lawsuit was needed to raise it as a subsequent issue.

      • Charles Vincent

        No I meant the first SCOTUS where they judged the constitutionality of the law itself.

      • Ilyssa

        Right, that’s what I am saying, when SCOTUS heard the original ACA challenge, this issue was not raised by either side in the initial suit. So the Court couldn’t have entertained it back then. They needed a subsequent suit that actually raised the issue.

      • Charles Vincent

        gotcha

      • Ilyssa

        For further reference. See Rule 10 of the Appellate Rules of Procedure: www[dot]uscourts[dot]gov/uscourts/rules/appellate-procedure[dot]pdf

      • Charles Vincent

        They have relaxed the rules on links you no longer need to modify them 🙂

      • Ilyssa

        Oh great. Didn’t know that. See how long it’s been. 🙂

      • Charles Vincent

        It surprised me to and I been here lol.

      • Charles Vincent

        Probably true we will have to see how the cookie crumbles. Although I don’t see this as the right creating a problem since it would have existed prior to the case during the drafting of the law itself. Plenty of blame to go around IMHO.

      • Ilyssa

        Well yea, there is plenty of blame to go around for poor drafting. That’s my final point in the article and why I re-wrote the statute the way it should have been written. However, for the sole purpose of this lawsuit, it just so happens to be a right wing group that brought the suit and that is now arguing that the plain language of the statute should be adopted. It is that reading (the plain language reading they want adopted) that creates the further constitutional issue. If the statute is read the way the government argues it should be read, then no further constitutional problems are created. Arguably.