A Couple of Overlooked Context Clues in King
In King, the government is looking to demonstrate from the broader context of the Act that Congress didn’t mean to withdraw tax credits from states with federal back-up exchanges. That context includes three stopgap measures designed to afford temporary relief until the exchanges went live.
One of those measures has received a lot of attention: the provision requiring state Medicaid programs to maintain their eligibility standards until “an Exchange established by the State” is up and running. On the challengers’ theory, that day will never come. Yet, as I explain elsewhere , “[t]here is zero evidence that Congress meant the ACA to freeze state Medicaid programs into perpetuity.”
I haven’t seen discussion of the other two stopgap measures. First, to extend “immediate access to insurance for uninsured individuals with a preexisting condition,” the ACA instructed the Secretary of HHS to set up “a temporary high risk health insurance pool.” But that high-risk pool, the ACA says , “shall terminate on January 1, 2014.”
Why the end-date? Because enrollees could just transition to the exchanges, as the very next part of the statute—titled “Transition to Exchange”—makes explicit. Per that part, the Secretary was to
develop procedures to provide for the transition of eligible individuals enrolled in health insurance coverage offered through a high risk pool established under this section into qualified health plans offered through an Exchange. Such procedures shall ensure that there is no lapse in coverage with respect to the individual … .
On the challengers’ theory, however, many of those high-risk individuals would have been pitched onto exchanges that were completely dysfunctional. In states without their own exchanges, the unavailability of tax credits would have led lots of healthy people to refuse to buy health plans. The result would have been a “near death spiral ” (RAND’s term, not mine) that would have driven the prices of health plans to extraordinary levels.
Even if she had temporarily extended coverage for high-risk individuals, as the ACA enabled her to do, the Secretary couldn’t have staved off an eventual “lapse in coverage” for those with limited means. Why read the statute in a manner that would frustrate the Secretary’s best efforts to adhere to Congress’s command?
Second, the ACA temporarily offered reinsurance protection to employers that offered health plans to early retirees. The fear was that, because retirees are expensive to cover, employers might be tempted to drop them from coverage. The reinsurance program was meant to sustain retiree benefits—until the program’s termination“on January 1, 2014.”
Why that date again? As a White House fact sheet from spring 2010 explains, that’s “when early retirees will be able to choose from the additional coverage options that will be available in the health insurance exchanges.” In other words, it’ll be no big deal if employers’ shed their early-retiree plans. The retirees can just shop on the exchanges.
On the challengers’ view, however, this option would have been a cruel joke for those retirees in states without their own exchanges. As employers cut coverage when the reinsurance program lapsed, retirees would have found themselves shopping on exchanges with shockingly expensive health plans. Why would Congress have been so solicitous of retirees from 2010 through 2013, only to kick them to the curb in 2014?
To be clear, none of this is a knock-down argument in the government’s favor. (I’ve made those arguments here .) And the unadorned reference to “an Exchange” in the provision governing high-risk pools that I quoted above does weakly suggest that Congress knows how to distinguish exchanges in general from state-established exchanges.
But it matters that these stopgap measures would work so poorly if the plaintiffs in King were right about what Congress meant. Their construction of the statute just can’t make sense of the ACA as a whole—further reinforcing the view that they’re reading the statute all wrong.