Wisconsin Gov. Scott Walker (R) spent “nearly two years” studying the Affordable Care Act, according to a live interview he gave to the Wall Street Journal in 2013, and what he discovered was that the central claim in a lawsuit seeking to convince the Supreme Court to gut Obamacare is wrong. Though Walker’s statement was not made in reference to this lawsuit, his understanding of the law has special significance in light of a particular constitutional doctrine at issue in this case, and his reading of the Affordable Care Act directly contradicts that of the lawyers seeking to undermine the law.
The Affordable Care Act gives states a choice: they can either set up an exchange where consumers can buy subsidized insurance plans or they can elect to have the federal government set up this exchange for them. Consumers with income below a certain level qualify for tax credits to help them afford this insurance. A case called King v. Burwell, however, asks the justices to cut off these tax credits in states with federally-run exchanges — an effort that could potentially collapse the individual insurance markets in those states if it succeeds. The plaintiffs’ premise in King is that Obamacare was never intended to offer credits to people in states with federally-run exchanges. Indeed, by reading one passage of the Affordable Care Act out of context, they claim that the law unambiguously states that only state-run exchanges are allowed to provide tax credits.
But that’s not the conclusion Walker reached after spending a couple of years considering the question. Rather, in his interview with the Wall Street Journal, Walker explains that there is no practical difference whatsoever between state-run and federally-run exchanges:
WALKER: When I looked — and I spent nearly two years looking at this . . . I visited [Washington DC], as a new governor in December in 2010. As part of that visit I met with Secretary Sebelius, the head of the federal department of HHS, and have spent the last two years with my team, my administration, my cabinet, working with the federal government trying to fully understand and comprehend what it meant to my state and other states. And it was clear! It’s a SINO, “state in name only.”
This really isn’t an exchange that the states run or even run in a partnership. The federal government determines what’s going to be covered. How it’s going to be covered. And the only distinction is whether or not a state can say that they’re running it, put up a sign that says they are running it. But, in the end, there’s no real substantive difference between a federal exchange, or a state exchange, or the in between, the hybrid, the partnership. And so I said, if I can’t run it, if I don’t have control over it, why would I take the responsibility of explaining to people something that I don’t have any control over.
To be sure, Walker emphasizes the fact that he elected not to have Wisconsin run its own health exchange because he felt that he would have insufficient control over how the exchange was operated. He goes on to assert his philosophic view that “any time you have a chance [sic] between the state running something or the federal government running something, we’re always much better off having the states run it.” In the process, however, he refutes the central thrust of the plaintiffs’ argument in King. Tax credits should not be denied to people in states like Wisconsin with federally-run exchanges because, in Walker’s words, “there’s no real substantive difference between a federal exchange or a state exchange.”
Nor is this a conclusion that Walker reached without carefully reviewing the question. To the contrary, Walker lays out the breadth of his nearly two-year inquiry into the differences between federally-run and state-run exchanges. He met with the most senior Obama Administration official entrusted with health policy, and he had an entire team of advisers working to determine whether there were practical differences between the two types of exchanges. The answer, in his own words, is “clear.” There is no substantive difference between the two under Obamacare.
Walker’s discovery matters for two reasons. Under the Supreme Court’s decision in Chevron v. Natural Resources Defense Council, judges give an extraordinary degree of deference to a federal agency’s reading of a statute. Unless the agency’s reading of the law conflicts with “the unambiguously expressed intent of Congress,” courts will defer to the agency’s legal interpretation so long as it is “based on a permissible construction of the statute.” In order to conclude that the King plaintiffs’ reading of Obamacare is correct, one has to believe that a governor who is openly hostile towards the Affordable Care Act spent nearly two years studying the law along with a team of legal and policy advisers, and yet he somehow missed the fact that the law gave him the power to cut off one of the most important provisions of the law in his state. That hardly indicates that the plaintiffs’ reading comports with “the unambiguously expressed intent of Congress.”
Additionally, Walker’s statement raises serious constitutional doubts about the plaintiffs’ reading of the law. The lawyers seeking to gut Obamacare argue that the tax credits are part of “a variety of ‘carrots’ and ‘sticks’ to induce states to establish Exchanges voluntarily.” Yet, when the federal government conditions the payment of federal money on states taking a particular action, such conditions are unconstitutional “if a State is unaware of the conditions or is unable to ascertain what is expected of it.” As the Supreme Court explained in 2006, the question of whether a state is able to ascertain whether federal money comes with strings attached must be evaluated “from the perspective of a state official who is engaged in the process of deciding whether the State should accept . . . the obligations that go with those funds.”
And yet, here we have Scott Walker explaining that, after spending two years studying the Affordable Care Act, he was completely unaware that one of the alleged “carrots” and “sticks” described by the King plaintiffs exists.
Walker’s Wall Street Journal interview, in other words, devastates the legal case against Obamacare. It reveals that a man who was tremendously motivated to find flaws in the law’s framework wasn’t even able to spot the alleged flaw identified by the King plaintiffs, and it raises grave constitutional doubts about these plaintiffs’ legal theory.