King v. Burwell
135 S. Ct. 2480
| SCOTUS | 2015Background
- The ACA implements guaranteed issue, community rating, an individual mandate, tax credits, and state or federal Exchanges to facilitate coverage.
- Exchanges can be established by a state or, if a state declines, by the Secretary of Health and Human Services; tax credits under §36B depend on enrollment through an Exchange established by the State under §18031.
- Petitioners—Virginia residents with a Federal Exchange—do not want to purchase insurance and challenge the IRS rule that makes credits available on federal Exchanges.
- The IRS regulation allowing credits on both state and federal Exchanges was upheld by the Fourth Circuit, which deferred to Chevron, while another circuit (Halbig) held the opposite in a related case.
- The issue presented is whether §36B credits are available to individuals enrolled through a Federal Exchange, which would influence the affordability and viability of the ACA’s three-reform package.
- The Court held that §36B credits are available on Federal Exchanges, and rejected the petitioners’ interpretation that credits are limited to State Exchanges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are §36B premium tax credits available on Federal Exchanges? | King argues credits apply only where a State Exchange exists. | Burwell argues credits extend to Exchanges established by the Secretary as a fallback. | Yes; credits available on Federal Exchanges. |
| Is the phrase 'an Exchange established by the State' ambiguous when applied to Federal Exchanges? | King contends the phrase plainly limits credits to State Exchanges. | Burwell contends context shows ambiguity permitting credits on Federal Exchanges. | Ambiguity exists; interpretive context supports credits on federal Exchanges. |
| Does the broader structure and purposes of the ACA require credits to be available on both State and Federal Exchanges? | King argues the structure favors State Exchanges and would destabilize markets otherwise. | Burwell argues the three reforms work together only if credits are available on all Exchanges. | Credits must be available on both State and Federal Exchanges. |
| Do provisions defining 'Exchange' and 'qualified individual' support treating Federal Exchanges as eligible for credits? | King asserts the wording and definitions tie credits to state-established Exchanges. | Burwell argues consistency across the Act implies applicability to Federal Exchanges as well. | Context and structure support applicability to Federal Exchanges. |
Key Cases Cited
- Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984) (established Chevron two-step framework for agency interpretation)
- FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120 (2000) (court cautions against agency interpretations that rewrite statutes)
- Lamie v. United States Trustee, 540 U. S. 526 (2004) (limits courts from treating drafting flaws as authority to rewrite statutes)
- Whitman v. American Trucking Assns., Inc., 531 U. S. 457 (2001) (statutory interpretation relies on text in context)
- Sturges v. Crowninshield, 4 Wheat. 203 (1819) (absurd results doctrine and statutory interpretation)
- Halbig v. Burwell, 758 F.3d 390 (D.C. Cir. 2014) (courts divided on whether credits are limited to State Exchanges)
- United States v. Detroit Timber & Lumber Co., 200 U. S. 321 (1906) (used for the interpretive principle that syllabi are not part of the opinion)