As I mentioned in two previous posts, the Supreme Court (SCOTUS) this past week decided to take the case of an appeal of a ruling by the 4th Circuit US federal court of appeals (King v. Burwell), in a case where the plaintiffs allege the Affordable Care Act (ACA) is ambiguous or conflicted on whether subsidies can be offered to lower-income persons who obtain coverage through Marketplaces established and run by the federal government.

Earlier I pointed out two huge flaws in the argument of the Plaintiffs.  Let me add a third, and perhaps the most important one.

The Congressional Budget Office (CBO) has the legal obligation to "score" (which means estimate the cost of" every piece of federal legislation) before it is passed. The nonpartisan CBO is a Legislative body, so it speaks for the Congress, reports to the Congress, answers to the Congress (especially its Legislative leaders, the committee chairs).  Every one of their documents that score legislation are vetted through the relevant committees (importantly by both majority and minority staff).

So it would seem quite important what the CBO said contemporaneously in 2009-10 as Congress was debating the ACA.  Did they say, routinely, in their documents that subsidies could NOT be provided to individuals obtaining insurance through the Exchanges created by and facilitated by the federal government (FFM), as alleged by the Plaintiffs in King v. Burwell?  One would think that if was indeed the case, it would have been known at the time, and widely discussed, and the very precise estimates produced by CBO would reflect this important point, and if it did not, certainly the staff from Legislators opposed to the ACA would point this out. This point was made by the Chairs of the key Senate and House committees with jurisdiction over the ACA at the time:
  • "When we asked it to estimate the cost of our legislation, the CBO understood our intent and repeatedly provided fiscal projections based on the availability of financial help in every state and the District. Even though early political opposition to the Affordable Care Act made it apparent that some governors might refuse to directly run their own marketplaces, thereby delegating such administration to the federal government, the CBO’s projections always correctly assumed that financial help would be available to qualifying individuals and families regardless."
So in the official score of the ACA it is significant and important that the score mentions the "subsidies" ten times in the textbut yet never once points out that the subsidies must be limited to those buying on state-based marketplaces (SBMs), as alleged by the Plaintiffs.  In fact, the CBO presents estimates of the number of people who will obtain subsidies, and it is obvious that these are people spread across the entire U.S.  So obviously the CBO was assuming then that subsidies would be available to those buying in the federal exchanges.

Furthermore, and to prove the case, in a 2012 document (after the famous SCOTUS decision on the ACA), the CBO said this: "CBO and JCT expect that subsidies will be available to people in exchanges run entirely by states, exchanges run entirely by the federal government, and exchanges run together by states and the federal government." [my emphasis added] (see footnote on page 7 of document).  Also, later in that document (page 11), the CBO explicitly points out that several states will not be expanding Medicaid, and that subsidies are available in those states as well, and it is well known that there is a strong correlation between the states not setting up state-based marketplaces and not expanding Medicaid.  Yet nowhere in this discussion does CBO make mention that subsidies are treated differently in FFMs as compared to SBMs.

Finally, in a May 2011 document, the CBO lays out in detail their methods for computing the subsidies under the ACA, and in this document again nowhere does the CBO make mention of any different treatment of subsidies in FFMs, as compared to SBMs.

An official body of the U.S. Congress, writing in a current document written at the time of passage of the legislation, interpreted the law as allowing subsidies in the federal marketplace.  This by itself provides what seems to me to be definitive evidence to reject the Plaintiffs' case in King v. Burwell.

Find my other two comments about the SCOTUS case (King v. Burwell):  
(1) here at this link and
(2) here at this link.