Nicholas Bagley parses the oral arguments in King v. Burwell

Over at healthinsurance.org, I have an interview up with Nicholas Bagley, post-morteming today's oral arguments in King v. Burwell, the lawsuit aiming to gut the ACA exchanges. Bagley,  a former appellate attorney at DOJ and currentl health law professor at the University of Michigan, is co-author of two amicus briefs in support of the government in King, both addressing issues that Anthony Kennedy probed in some depth in today's hearing.

Kennedy lifted the spirits of ACA supporters early on by questioning whether the plaintiffs' claim that the law aimed to essentially force states to form their own health exchanges by not authorizing premium subsidies to be credited through the backup exchange would render the law unconstitutionally coercive.That was the upshot of one Bagley brief. But he then turned around and suggested that the law might be, in effect, both unambiguous (in denying credits through the federal exchange) and (potentially) unconstitutional.

Much later, Kennedy explored a more obscure point. While the Supreme Court generally holds that if a law is ambiguous, the courts should defer to the interpretation of the agency charged with implementing it, that might not be the case here:

Sprung: What about Justice Kennedy’s other moment in which he voiced arguments put forward by the plaintiffs – to the effect that if the statute is ambiguous, the IRS might not have the authority to resolve the ambiguity?

Bagley: That Chevron point should be getting more attention. [Chevron is a case in which the Supreme Court held that if a statute’s language is ambiguous, courts should defer to the agency charged with resolving the ambiguity.] The upshot of that argument is that the question of whether the federal exchange is authorized to credit subsidies to qualified buyers of private plans is too important to leave to the IRS – we shouldn’t lightly assume that Congress delegated the authority to the IRS to resolve that ambiguity. That’s especially so, he said, in the context of tax credits, which are a kind of exemption from taxation. There’s a canon of statutory interpretation suggesting that exemption from taxation ought to be construed narrowly.

Justice Kennedy was picking up on those arguments in the petitioners’ brief, I filed an amicus on behalf of the government that disputes all those points But if you buy those arguments you’d be skeptical of the claim that Congress meant to give the IRS the authority to craft the rule. 

I hope you'll read the whole. And while you're at it, a prior interview I did with Bagley on the extent to which governors and state legislatures are free to repeal and replace the ACA in their own states.

P.S. Bagley blogs at The Incidental Economist.