where academia meets practice in business education

You’ve undoubtedly learned by now about the U.S. Supreme Court’s decision to uphold the essential income tax terms of the Affordable Care Act. Had the Court ruled differently, millions of individuals would have lost the tax credits that they need to afford insurance coverage, and the entire health insurance market might have plunged into a state of chaos.

What you might not have learned, though, is the manner in which Chief Justice John Roberts deployed the legal theory of Associate Justice Antonin Scalia to eviscerate Scalia’s own dissenting position. Because Scalia bitterly opposes the Affordable Care Act, Roberts felt compelled to address Scalia’s contrary position when he wrote the majority opinion in support of the law.

You see, Scalia is known as an originalist who believes that each law should be interpreted in a manner that reflects the original intent of the legislators who wrote the words of the law. That’s why, for instance, he’s ruled against many (though not all) attempts to impose federal gun control laws on the American people.

The Second Amendment to the United States Constitution states that “the right of the people to keep and bear Arms shall not be infringed.” According to Scalia, the original intent of the Founding Fathers who wrote that phrase was to apply it to purchases and uses of common weapons by the general citizenry, but not to purchases and uses of dangerous and unusual weapons by felons, the mentally ill, etc.

Scalia employed similar logic in crafting his position regarding the Affordable Care Act. He noted that the authors of the health care law wrote that tax credits should be made available to citizens who sign up for coverage on health exchanges that are “established by the states.” He thus concluded that this simple language was designed to prohibit any credits from being utilized by citizens who sign up for coverage on exchanges that are established by the federal government.

Roberts actually agrees that laws should be interpreted in a manner that reflects the original intent of the legislators. Ironically, though, he employed this very theory to refute Scalia’s position. According to Roberts, the United States Congress drafted the Affordable Care Act “in order to improve the health insurance markets and not destroy them.”

Because Scalia’s position would have denied tax credits to millions of Americans and thus rendered health insurance unaffordable to them, Roberts concluded that Congress must have originally intended to write that credits should be available on exchanges that are established by or for the states. The omission of these two implied words, according to Roberts, must have represented a case of “inartful drafting.”

In Roberts’ own language, “the statutory scheme … would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress designed the Act to avoid.”

In other words, Roberts fully agrees with Scalia that the original intent of the legislators must be upheld in court cases about the law. But then, employing that very principle, he wrote that “the combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner.”

Whether you agree with Roberts or not, it’s hard not to admire his logic. Likewise, it’s also difficult to avoid admiring his ability to use Scalia’s own legal philosophy to rebut his position.

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