To the extent that there’s an argument against reading the ACA to include subsidies on the federal exchanges, it has to be that while Congress intended the subsidies to be available on both, reading the literal language of an isolated provision it says that the subsidies are only available on state exchanges, so tough luck. This is, to be clear, a terrible argument, but it’s the best one available. To my amazement, as I first saw on Twitter yesterday, some conservatives are arguing that Congress actually intended for the federal exchanges not to include subsidies. For example, Ramesh Ponnuru:
Supporters of Obamacare have been lamenting that the law shouldn’t be crippled by a mere “drafting error.” But it’s not at all clear that restricting tax credits to state-established exchanges was a drafting error. If Obamacare had proven more popular, or resistance to it weaker, then most states would have established exchanges. And if the law were put in place as written — with the restriction on tax credits — then the few holdouts would be under pressure to establish exchanges to get credits for their residents. Other health-care legislation before Congress at the same time as Obamacare had the same restriction.
It’s wrong, then, to say that Congress obviously didn’t intend to include this restriction.
This argument is…amazing. It may be true that many members of Congress were too optimistic about states creating their own exchanges. But we also know that Congress anticipated that some states would not create their own exchanges…because the statute gave the federal government the power to create exchanges when states wouldn’t. Ponnuru’s reading of the statute can’t explain why they bothered to do this at all. The actually existing Congress assumed that some states would not participate but wanted the exchanges available in all 50 states. So Ponnuru’s explanation is plainly wrong, and we’re left with an implicit assumption that Congress established the power to have the federal government to create exchanges but wanted them not to work, which is absurd.
In addition, we know that Congress anticipated significant state resistance because of the way it structured the Medicaid expansion. If Congress thought that all but a few states would establish exchanges with little direct incentive to do so, then surely the huge gobs of federal money that comes with accepting the Medicaid expansion would be more than enough for states to buy in. But Congress didn’t think that, and until the statute was ineptly re-written by John Roberts all existing Medicaid money was contingent on accepting the expansion. Ponnuru’s explanation cannot account for this either.
But there’s a more fundamental problem with the arguments made by the majority of the D.C. Circuit panel and the Republicans cheering them on. The ACA was not written by Republicans — it was written by public officials who wanted to substantially increase access to medical care. The central function of the subsidies wasn’t to create incentives for state governments; it was to ensure that the non-affluent uninsured who didn’t qualify for Medicaid could purchase insurance on the exchanges. To not provide subsidies on the federal exchanges would defeat the very purpose for which they were constructed. If you understand the ACA from the standpoint of those who passed it, this couldn’t be more obvious. Conservatives trying to evaluate the goals of the ACA are like elephants trying to play a toy piano.
And, needless to say, this is why as a first approximation zero supporters of the ACA either inside or outside Congress are persuaded by this latest ad hoc attack on the law. In addition to the other ways in which it’s silly it’s premised on not comprehending what the ACA was trying to accomplish.