Anomalies in the Affordable Care Act that Arise from Reading the Phrase 'Exchange Established by the State' Out of Context

19 Pages Posted: 24 Feb 2015

See all articles by Timothy Stoltzfus Jost

Timothy Stoltzfus Jost

Washington and Lee University - School of Law

James Engstrand

Independent

Date Written: February 23, 2015

Abstract

The Supreme Court is currently considering in King v. Burwell whether residents of all States can receive premium tax credits under the Patient Protection and Affordable Care Act (ACA). The Plaintiffs-Petitioners brought this litigation as a challenge to the validity of a Treasury Department rule allowing all ACA health insurance Exchanges or marketplaces, including federally facilitated Exchanges (FFEs), to support and grant the credits. They invite the Court to focus solely on four words in two subsections of Section 36B of the Internal Revenue Code that they interpret as limiting tax credits to individuals who can use a State-operated Exchange to enroll in qualified health plans. If the Court follows existing precedent, however, it will look at the text of the statute as a whole, rather than at this single clause in isolation. If it does, the Court will see that reading “established by the State” as the limitation that Petitioners urge upon it makes it necessary for the Court to engage in endless rationalizations, evasions, and circumventions in reading the rest of the statute. Indeed, if the Court accepts their reading, at least fifty provisions of the ACA would be made anomalous, if not absurd. This article examines those anomalies.

Keywords: King v. Burwell, Affordable Care Act, statutory interpretation, premium tax credits, Supreme Court

JEL Classification: K10, K30, K32

Suggested Citation

Jost, Timothy Stoltzfus and Engstrand, James, Anomalies in the Affordable Care Act that Arise from Reading the Phrase 'Exchange Established by the State' Out of Context (February 23, 2015). Vol. 23 University of Miami Business Law Review, Washington & Lee Legal Studies Paper No. 2015-24, Available at SSRN: https://ssrn.com/abstract=2568655

Timothy Stoltzfus Jost (Contact Author)

Washington and Lee University - School of Law ( email )

Lexington, VA 24450
United States
540-458-8510 (Phone)
540-458-8488 (Fax)

James Engstrand

Independent

6713 Ann Arbor Terrace
Oklahoma City, OK 73132
United States
405-722-6928 (Phone)

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