Abbe Gluck, who has co-authored the definitive articles (here and here) on how Congress approaches statutory interpretation, has a post on Balkinization offering an analysis of the poorly drafted Affordable Care Act, and the Medicaid exchange cases.
What is relevant here is that the ACA is a very badly drafted statute. And it’s badly drafted for a simple reason that turns out to be important to understanding how the pending litigation should be resolved: Because Senator Ted Kennedy died in the middle of the legislative process and was replaced by Republican Scott Brown, the statute never went through the usual legislative process, including the usual legislative clean-up process. Instead, because the Democrats lost their 60th filibuster-preventing vote, the version that had passed the Senate before Brown took office, which everyone initially had thought would be a mere first salvo, had to effectively serve as the final version, unchangeable by the House, because nothing else could get through the Senate. In the end, the statute was synthesized across both chambers by an alternative process, called “reconciliation,” which allows for only limited changes but avoids a filibuster under Congress’s rules. Keep this in mind and read on….
So, the statute is sloppy. It has three section 1563s, for example, as Tim Jost has pointed out. The section at issue in this case, the one introducing the tax subsidies, is another example of the sloppiness. It states that the subsidies shall be available to individuals enrolled in insurance “through an Exchange established by the State under section 1311” of the Act (emphasis added).The challengers argue that this text clearly excludes individuals enrolled through federally-operated exchanges from receiving the subsidies. Section 1321 of the Act, however, further discusses the state exchanges and sets forth the process for the federal government to step in when the states fail to operate them. In such case, the Act provides, HHS shall “establish and operate such Exchange within the State” (emphasis added). The Government points to this and other language to argue that when the federal government operates a state exchange it stands in shoes of the state exchange and is “such an exchange” for purposes of the Act. At a minimum , the Government argues, the statute is more than sufficiently ambiguous to trigger agency deference.…
My view is that whatever you believe about the merits of these respective textual arguments, a basic understanding of the ACA’s legislative process makes clear that Congress intended for the subsidies to be available on the federal exchanges. I think the statute is sloppy, but I think its meaning is plain—and not because I am relying on fuzzy notions of statutory purpose. Rather, there are formalist, structural features of the legislative process that make this case an easy one.
In particular, here are her thoughts on the reconciliation process:
As noted, the Reconciliation process was the House-Senate bill-synthesizing process that was used in the ACA instead of the usual Conference Committee process. Everyone who follows Congress knows that the Conference stage is the most important stage of the legislative process. Even the courts, which are generally ignorant about the legislative process, acknowledge this fact about the importance of Conference. It’s the key stage for two reasons. First, it’s where the critical compromises get worked out across the two chambers. And second, it is the last stage of the process. In the case of the ACA, Reconciliation took the place of Conference, and Reconciliation was particularly important because the two chambers did not have their usual back and forth during the ordinary legislative process (again, because everyone was stuck with Kennedy version of the Senate-passed bill). Reconciliation was the only way, in the ACA story, that the two chambers reached a final agreement. It was the critical moment, and the provisions added then are where the courts should focus their attention, and where any ambiguities should be resolved.
The counterargument, of course, and one the challengers make, is that Congress could have done more to clarify its intentions during that Reconciliation process. Sure, that would have done everyone a big favor. But even assuming that the special rules of Reconciliation (which only allow certain budget-related changes) would have permitted such clarifying changes, that kind of negative inference makes little real-world sense –not only because of the exceedingly messy context of the ACA’s drafting but, more importantly, because there is zero evidence that anyone thought there was anything to clarify. Because both chambers were certain that the subsidies applied to the federal exchanges, there was no reason to focus the chambers’ final-stage political efforts on uncontroversial provisions.