Something novel? The case against Obamacare is looking weaker

The Supreme Court should have killed Obamacare when it had the chance. The challenge to the individual mandate three years ago was, or at least should have been, a slam-dunk. Unfortunately, Chief Justice John Roberts decided for whatever reason to uphold the law, even if he had to twist himself into logical pretzels to do it. So rather than calling the mandate what it was — an egregiously unconstitutional expansion of the Commerce Clause power — he ended up calling the penalty for failing to buy insurance simultaneously a tax and not a tax.

This time around, it seems as though the tergiversations are mostly being committed by those who want to undermine the law. Their current challenge, in King v. Burwell, concerns whether tax credits for insurance purchased through federally created exchanges are legitimate, or whether tax credits can be given only to those who bought their policies through an "Exchange established by the State," as the law says in a couple of places.

A great deal of ink has been spilled debating the meaning of those five words. There is good evidence to support the plaintiffs' view — e.g., statements by one of its chief architects, Jonathan Gruber, such as: "If you're a state and you don't set up an exchange, that means your citizens don't get their tax credits."

But there is also good evidence to support the other view. For instance: Another section of the law limits individual eligibility to buy insurance to those who "reside ... in the State that established the Exchange." If that excludes federal exchanges, then nobody will ever be eligible to buy insurance on a federal exchange.

In that case, why did Congress provide for such exchanges at all? Did Congress mean something else — or was this a another drafting error? And if this was a drafting error, then what does that say about the plaintiffs' contention that the wording of the five-word phrase is intentional?

When the meaning of a statute is unclear, courts traditionally have deferred to the executive agency's reading, rather than imposing their own interpretation.

The IRS has read the five-word phrase in a controversial way, but in a way that seems consistent with the overall intent of the law. Any argument that the court should countermand its decision should be, if not overwhelming, at least definitive.

Yet there's another reason to doubt the plaintiffs' case, which came out during oral arguments. In a recent piece in the journal Jurist, Timothy Jost, a law professor at Washington and Lee University in Lexington, lays it out.

The term "Exchange established by the State" appears several other times in the law, he notes. In Title II, the law says states must create procedures for enrolling people in Medicaid and the related Children's Health Insurance Program (CHIP) who have been identified through "an Exchange established by the State." If the states fail to create such enrollment procedures, then they cannot receive federal Medicaid funding — as in none whatsoever.

But if the critics of the law are correct about the disputed phrase, then none of the states with a federal exchange have the required enrollment procedures in place, because they do not have the right type of exchange in place. They have federal exchanges, and the procedures must relate to state exchanges.

This means the federal government must cut off not only the tax subsidies for private plans purchased on federal exchanges, but all federal Medicaid and CHIP funding for those states as well. That would unspool not only Barack Obama's signature achievement, but also Lyndon Johnson's. "The ambitions of the right-wing organization that brought this litigation," Jost writes, "have been much too modest."

Is this really what Nancy Pelosi & Co. had in mind? It seems highly unlikely. Of course, what Congress had in mind and what it actually did need not be synonymous. Pelosi herself said Congress had to pass the law to find out what is in it. Now perhaps we are finding out that a Democratic Congress wrote a law to expand health-care coverage for millions in such a way that it does the precise opposite.

In any event, the federal government actually could not cut off all Medicaid funding — not now, anyway. Congress tried to do that through the ACA once, when it sought to force states to expand Medicaid by denying all Medicaid funding to states that didn't do so. The Supreme Court said that was unconstitutionally coercive.

The plaintiffs in King could still win. The High Court could decide they are right about the meaning of the disputed phrase, strike down the tax credits for insurance policies bought on federal exchanges, and then strike down the provisions denying all Medicaid funding to states that fail to comply, just as it did once before.

Anything is possible. But it stretches credulity to the breaking point to argue that Washington (a) passed a law to expand health coverage, and then provided for federal exchanges that would not only (b) prevent anybody from buying insurance through those very exchanges but also (c) cancel Medicaid and CHIP coverage for everybody living in any state with such an exchange.

Congress often passes laws that produce unintended consequences. But a law written expressly to frustrate its own primary objective would be something novel indeed.

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A. Barton Hinkle is Deputy Editor of the Editorial Pages at Richmond Times-Dispatch.