Unlike Its Opponents, People Who Supported the ACA Wanted it to Work

Josh Blackman offers another attempt to argue that Congress actually intended the federal exchanges the ACA established not to work. Inevitably, it’s transparently wrong because like many ideological opponents of the ACA he appears to be incapable of understanding what proponents of the ACA were actually trying to accomplish.

Any such argument, as we know, starts with the nearly insurmountable hurdle of ascribing an intent to the drafters and enacters of the ACA that (aside from some stray comments from one consultant that 1)do not suggest that a denial of subsidies would be permanent and 2)are inconsistent with what the consultant assumed in 2010 and explicitly argues in 2014) is wholly rejected by said drafters and enacters and is held only by the most fanatical opponents of the ACA. Blackman, needless to say, cannot adduce any actual supporter of the ACA who agrees with his interpretation, a rather serious problem since the bill was written and enacted by supporters, not opponents. Instead, he tries to infer an intent to create federal exchanges that wouldn’t work from the structure of the Medicaid expansion:

As further evidence of legislators’ state of mind, we could take the fact that the Affordable Care Act’s Medicaid expansion worked exactly on this theory of carrots and sticks. Uncooperative states, and their residents, would be punished.

In 2010, Arizona inquired about what would happen if it declined to expand its Medicaid coverage under Obamacare. The federal government replied that it would eliminate its contribution to the state’s Medicaid budget entirely. The Department of Health and Human Services sent Arizona Governor Jan Brewer an ominous and pointed letter: “In order to retain the current level of existing funding, the state would need to comply with the new conditions under the ACA.” This observation was followed by a stark warning: “We want you to be aware that it appears that your request…would result in a loss of [all] Medicaid funding for Arizona.”

This argument fails on multiple levels:

• It completely fails to understand the point of cooperative federalism.  The legislators who voted for the ACA were not trying to “punish” states or their citizens — they were trying to offer a good enough deal that states would agree to expand Medicaid coverage.  The didn’t think that the citizens of Arizona would be punished; they assumed Arizona would take the money, just like it takes the money to establish a state drinking age.
• The original structure of the Medicaid expansion also makes clear how nonsensical the Halbig interpretation of the ACA is.  Asserting that the ACA intended the federal exchanges not to work suggests that the legislators assumed that the vast majority of states would establish exchanges and were surprised by the scope of the opposition at the state level.  But the fact that Congress made all Medicaid funding contingent on accepting the expansion indicates that Congress fully anticipated substantial state resistance.  If Congress didn’t think that offering a huge pool of money funding more than 90% of the expansion was sufficient incentive for some states to take it, why on earth would it think that the mild disincentives inherent to not setting up state exchanges (citizens do not get subsidies…but are also therefore exempt from the mandate) would be sufficient?  The answer, of course, is that it didn’t.  It assumed that some states would be unwilling and/or unable to establish exchanges.
• Which brings is to the final crucial point: Blackman cannot explain why Congress bothered to authorize the federal government to establish the state exchanges at all.  If the federal backstop was absent, then the Blackman/Halbig interpretation would be plausible.  But Congress did create a backstop, because it assumed that some states wouldn’t establish exchanges, but wanted the exchanges to be operative in all 50 states.  Blackman is asking us to believe that Congress correctly anticipated that some states wouldn’t establish exchanges, created a mechanism that would correct this problem, but then intended for the solution not to work.  To restate this argument is to refute it; it’s an absurd reading of the statute.  Which is why (one very ambuguous and repudiated coming and going exception aside) no supporter of the statute agrees with it.

I’ve said it before and I’ll probably have to say it again: reading people who are fundamentally hostile to the ACA in principle trying to explain its objectives is like watching an elephant trying to play a toy piano.  Projection is a poor means to determine legislative intent.

…see also.  And definitely read Beutler on Halbig troofers.