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Obamacare: What does “established by the State” mean?

April 22, 2015

By Jeremy Quattlebaum, Student Voices staff writer

The Affordable Care Act, commonly known as Obamacare, is again being challenged in the Supreme Court, but this time the meaning of the law, not its constitutionality, is before the court.

The Affordable Care Act requires most people to have a minimum level of health insurance through their employer, government coverage such as Medicare or Medicaid, or an individual insurance plan. To increase access to affordable health insurance, the law provided for the creation of health insurance exchanges, or marketplaces, in states where people can shop for health plans. People can qualify for federal subsidies to help pay for insurance coverage. In the states that chose not to set up an exchange , the federal government did so.

The language in the law that referred to exchanges “established by the State” is at the heart of the case.

Oral arguments were heard on March 4, 2015, in King v. Burwell, which centers on whether people in the 34 states that have not established their own health exchanges received federal subsidies illegally.

Challengers to the health care law argue that “established by the State” means that only people in the 16 states that created exchanges should receive federal subsidies. They say that people in the 34 other states – a total of 7.4 million – were not entitled to the subsidies.

King v. Burwell is an example of a statutory interpretation by the Supreme Court. The court is being asked to decide the meaning of the law and to interpret the law in a way that is true to its intention of the law but that is still constitutional. This is different from other cases. For example, in Tinker v. Des Moines Independent Community School District (1968), the justices decided whether the students’ constitutional rights were violated.

Justice Anthony M. Kennedy questioned if the challenger’s interpretation would mean that the law was intended to punish the states for failing to establish their own exchanges, an overstepping of the powers of the federal government.

Kennedy said: “Let me say that, from the standpoint of the dynamics of federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the states are being told either create your own exchange, or we’ll send your insurance market into a death spiral. We’ll have people pay mandated taxes which will not get any credit on the subsidies. The cost of insurance will be sky-high. But this is not coercion?”

Representing the challengers, Michael A. Carvin emphasized that the justices must make a plain reading of the law.

Justice Elena Kagan questioned Carvin’s reading of the law, arguing that the law should be interpreted by the entire body, the over 1,000 pages that make up the Affordable Care Act, and not only four words. She said, “We are interpreting a statute generally to make it make sense as a whole, right? We look at the whole text. We don’t look at four words. We... try to make everything harmonious with everything else.”

Justices Samuel Alito and Antonin Scalia questioned the supporters’ argument that interpreting the law the way the challengers intended would send the health care system into a “death spiral,” saying it was the court’s duty to carry out the law the way it was written, regardless of the economic consequences.

Solicitor General Donald B. Verrilli Jr., representing the Obama administration, argued that the challenger’s reading of the law was not in line with what Congress intended. He said, “It revokes the promise of affordable care for millions of Americans. That cannot be the statute that Congress intended.”

Scalia challenged this argument, saying, “It may not mean the statute they intended; the question is whether it’s the statute they wrote.”

Alito also questioned Verrilli’s arguments, saying: “If Congress did not want the phrase ‘established by the State’ to mean what that would normally be taken to mean, why did they use that language? Why didn’t they use other formulations that appear elsewhere in the act? Why didn’t they say ‘established under the act’? Why didn’t they say, ‘established within the State’?”

Update, June 25, 2015: By a 6-3 vote, the Supreme Court ruled that federal subsidies should be available to states that have not established their own health insurance exchanges.

 What do you think?

How should the Supreme Court rule in King v. Burwell? What does “established by the State” mean? Which party’s arguments do you agree with? Join the discussion and let us know what you think!
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Jabro/Creekside High school
"Established by the state means" If the state hasn't approved it , there is no effect on them.

Stroudsburg, PA
Mr.Hanna SJHS
"Established by the state means" if it hasn't been approved by the state then it doesn't effect them.

“Established by the state” means that if the state hasn’t taken action to establish Obamacare then it shouldn’t affect them, so the Supreme Court should just go with the most understood. So the 16 states that established Obamacare should receive subsidies, and the other 34 who haven’t done so shouldn’t receive anything. I believe that the Supreme Court should just get together and go over Obamacare again and try to pass an amendment or write a new law that goes along with it, or they should just throw it out the window.

Established by the State, means whichever state establishes the Obama care health act, will receive subsidies by the federal government, while the states that don't will not. Kennedy is arguing that when they are force to establish the healthcare, then mandated taxes will be imposed to the citizens. However, there is no mandatory taxes that is mentioned in the Obamacare health act. It mentioned established by the state, so which means if the state shall establish is if they so wish.

In King v Burwell, the Supreme Court should rule these subsidies denizens in unmarketed states unconstitutional because the law requires the state to establish the markets. With that being said, this is extremely harmful to these individuals because their basic access to healthcare is being infringed upon because their state governments are too recalcitrant and self-absorbed in their own beliefs, they are willing to let some of their constituents suffer. The providing of federal subsidies to unmarketed citizens is not morally wrong, but just does not satisfy the requirement of the law. The legislators and governors not setting up markets is morally wrong. The Supreme Court should not allow the continuation of unmarketed federal subsidies; however, the negligence to create state markets should also be declared unconstitutional.

The language in the law that refers to the exchanges "established by the State" mean that it the state has not gone through the process of establishing Obamacare

The government’s decision to offer federal subsidies to people living in states that lack an established health insurance market is a well-meaning decision. That said, given the language of the law, it would be illegal to allow the continuation of such subsidies without amending the law. It is understandable that the government would want to continue these subsidies; after all, they are incredibly helpful to people purchasing health insurance. However, they must make changes before they can continue to do so.

The Supreme Court should go with the meaning that is the clearest and most widely understood: “established by the state” means that if the state has not taken action to establish Obamacare then it shouldn’t affect them. So yes, the 16 states who established Obamacare should receive federal subsidies and the 34 who have not shouldn’t, and are receiving subsidies illegally. If the Supreme Court intends to allow the law to apply to every state regardless of their establishment status, they can pass an amendment or write a new law to go along with the old one or scrap Obamacare altogether and try again. But this law that uses the words “established by the state” should mean and act upon exactly that. There is no tricky wording or turn of phrase. What is written is what is written,and what is written is as clear as day.

I think that the Supreme Court should rule in King V. Burwell. Established by the state means that the state made that right and or whatever they are talking about. I do not agree or disagree with either or.

Established by the state I believe was meant to be interpreted as funded for by the state, so if the state should choose not to create the exchange they should not receive federal substitutes, because that it what is written in the Affordable Care Act. However in doing this government has overstepped their boundaries. I agree with Justice Kennedy that doing this a form of economic punishment to the state, because now states that have to establish their own will have to mandate higher taxes on taxpayers.

The Supreme court should decide that if the states did not establish exchanges then they should not receive subsidies. Although congress meant something different when they wrote “established by the state” they have to understand that the common understanding of what this means is what will be interpreted. The federal government cannot subsidize insurance of the states that did not set up their own exchange.

The Supreme Court should rule in favor of the challengers in the King v. Burwell case because it states on if whether or not people in the other thirty-four states that haven't established their own health exchanges yet they receive federal subsidies illegally. The challengers feel that they should receive federal subsidies too like you cant deny that to them just because the original sixteen states created exchanges which is meant by the term "established by the Senate". An i agree with a few statements that have been said like when Justice Antonin Scalia said ,"It may not mean the statute they intended; the question is whether it's the statute they wrote". Meaning that the way it was written should have been intended for those on the people who decided to make these health care acts rather than take it to the Supreme Court to determine its laws rather than being constitutional.

According to the report given by Congress they should rule in the favor of the challengers, the way that it was stated informs the court that “established by the State” means that if a certain state does not create its own health exchange the people living in that state are not entitled to the subsidies like those people in states who have their own health exchange. My reasoning behind this is that Congress may not have meant for this to be the true meaning but with the wording used this is the denotation that can be assumed from the courts. Like I stated once before, “established by the State” means that in order for the people of a certain state to reap the benefits of Obamacare their government must create its own health exchange in order for the plans to be carried out properly and safely. I agree with the argument of Justices Samuel Alito and Antonin Scalia because the courts must not base their decision off of what Congress says it meant by the bill but rather what is written in the proposal. Just like Antonin Scalia stated, “It may not mean the statute they intended, the question is whether it’s the statute they wrote.”

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