Today, the United States Supreme Court once again opted not to rule a key provision of the Affordable Care Act unconstitutional. The case at issue, King v. Burwell, was technically not a challenge to the Affordable Care Act itself but rather the IRS’s implementation of the Act.
“In a democracy,” Chief Justice Roberts wrote for the majority, “the power to make the law rests with those chosen by the people. Our role is more confined—’to say what the law is.’”
Such a statement is quite ironic given that the decision takes a statutory phrase and then contorts it to say the exact opposite of its natural meaning. While the policy implications of the Supreme Court’s upholding of the ACA will likely grab most of the headlines in the coming weeks, the Court’s complete abdication to the executive on matters of statutory interpretation could shake the very foundations of our democracy for decades to come.
The fundamental question at issue in King v. Burwell was whether the IRS had exceeded its congressional mandate. The Affordable Care Act (ACA) sets up a scheme through which individuals purchase health insurance through government-run “Exchanges.” The ACA, as written, authorizes the IRS to provide tax subsidies only to those who purchase their healthcare though an Exchange “established by the State.” However, the IRS opted to provide subsidies to Americans who purchased their health insurance through Exchanges established by both the state and the federal government.
Chief Justice Roberts admits outright that “the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” Justice Scalia had a biting response to this statement:
The Court claims that “the context and structure of the Act compel [it] to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” I wholeheartedly agree with the Court that sound interpretation requires paying attention to the whole law, not homing in on isolated words or even isolated sections. Context always matters. Let us not forget, however, why context matters. It is a tool for understanding the terms of the law, not an excuse for rewriting them.
The saddest part about Justice Scalia’s dissent is that, as of the Court’s opinion this morning, he is wrong. He is not wrong because he is articulating the principles of statutory construction incorrectly. He is now wrong because the Supreme Court is not simply an interpreter of law – it is also itself a creator of law.
Generally, regulations are evaluated under the Chevron test to determine whether they exceed the mandate of Congress. That test asks whether to grant deference to a government agency’s interpretation of a statute which it administers.
In order to determine whether such deference is warranted under Chevron, the Court is first supposed to ask whether Congress has spoken directly to the precise question at issue. If the intent of Congress is clear, that is the end of the matter. However, if Congress has not directly addressed the question at issue, then the Court should simply determine “whether the agency’s answer is based on a permissible construction of the statute.”
However, the Court opted not to use the Chevron framework. Its stated reason for doing so was because this is an “extraordinary” case that affects a question of deep “economic and political significance” – the question of whether subsidies are available on Federal Exchanges. Under this rationale, the Court stretched the amount of deference due to administrative agencies to the point where the Internal Revenue Service now has the “discretion” to take an action that is the exact opposite of what the statute explicitly states.
It would seem that the Court, before ever taking up the case, decided that it would find a way to uphold the Affordable Care Act. In doing so, it has handed administrative agencies a powerful new tool. For years to come, agencies will argue in federal courts throughout the nation that they have discretion to do as they please, all due to the fact that their actions affect questions of “economic and political significance” as stated in King v. Burwell. The Court has left its subordinate tribunals with the task of determining when an issue is of such “significance” that administrative agencies should have unfettered discretion to ignore the limitations of Congress and instead unilaterally implement the policy preferences of the Executive.
The Roberts Court today secured its legacy as a Court that twisted the law in order to serve the predetermined purpose of upholding the political class’s cause of choice. If it was not bad enough that this legacy in the short term leaves the American people with a health care system that focuses on “coverage” and “insurance” rather than actual access to healthcare and cost controlling measures, it also has set the stage for administrative agencies to expander their power far beyond their congressional mandate.