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Obamacare runs roughshod over separation of powers

This week, the U.S. Supreme Court will weigh Obamacare’s fate for a second time. The high court handed the law a reprieve in 2012, when Chief Justice John Roberts authored an opinion upholding the individual mandate requiring Americans to obtain health insurance.

On March 4, the nine justices will consider King v. Burwell, which challenges the federal government’s authority to distribute billions of dollars in subsidies designed to offset the cost of insurance sold through the federal government exchange, Healthcare.gov.

The decision, which will likely come down in June, should be an easy one for the justices. The text of the Affordable Care Act does not grant the feds that power. If the high court has any respect for the letter of the law – not to mention the constitutional principle of separation of powers – it should rule against the Obama administration.

The plaintiffs’ case is unimpeachable. The Affordable Care Act intended for states to establish their own insurance exchanges. To coax them into doing so, section 36B of the law provided that the federal government would offer premium subsidies in the form of tax credits “through an exchange established by the State.”

It’s not uncommon for the federal government to use cash to encourage states to do its bidding. For instance, the feds have long threatened to withhold money for highway construction unless states set their minimum legal drinking age at 21.

Thirty-seven states, however, decided not to build exchanges on their own, and left the federal government to do it for them. That raised a problem. Obamacare’s architects never imagined that the states would refuse to build exchanges. So they never bothered to give the federal government the authority to hand out subsidies. But rather than go to Congress to get that authority, the Obama administration had the Internal Revenue Service “deem” that the federal exchange was actually a state exchange.

Not only does such a move defy basic reading comprehension, it also violates the principle of separation of powers. Article I of the Constitution charges Congress with making laws. Article II directs the president to faithfully execute them. It’s up to Congress to determine whether to distribute subsidies through the federal exchange. But the Obama administration has assumed that power itself, in direct violation of the Constitution.

The administration’s defenders, including a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit, have pointed to Chevron U.S.A, Inc. v. NRDC, a 1984 Supreme Court case that gave federal agencies some interpretive leeway if a law was ambiguous

But section 36B’s text is unambiguously clear. And Chevron orders “the court, as well as the agency, [to] give effect to the unambiguously expressed intent of Congress.”

Even if the Affordable Care Act’s text were unclear, the fact that the administration has usurped Congress’s constitutional power to tax by unilaterally handing out tax credits through the federal exchange renders Chevron inapplicable. Indeed, according to a 1988 Supreme Court case, United States v. Wells Fargo Bank, “exemptions from taxation are not to be implied; they must be unambiguously proved.”

Last year, the U.S. Supreme Court summed up its duty nicely in Burrage v. United States: “The role of this Court is to apply the statute as it is written – even if we think some other approach might ‘accord with good policy.’”

That’s exactly what the court should do this week when it hears King v. Burwell. The nine justices should side with common sense, and strike down the federal government’s effort to distribute subsidies through the exchange it operates.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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