“Establishing” Health Exchanges: Ways Out of the King v. Burwell Trap
The trouble that is the King v. Burwell case arises because of one sub-sub-section of the law which says “established by the state” rather than “established in the state” or “established for the state”. The purpose of “established by the state” in its context:
…the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311…
is not to keep subsidies from being paid to those who purchase insurance on the federal exchange but rather to restrict subsidies to health plans purchased by residents of California from the California exchange–rather than, say, from the Nevada exchange. But it says “by” rather than “in” or “for”. And misreading has its day. (Never mind that elsewhere in the law it says that if the state takes no action the federal government shall establish “such exchange”–where “such exchange” is that very exchange established by the state under 1311: you have to misread the “by” and not read the “such” at all to make the plaintiff argument.
Now comes Ann Marie Marciarille to focus on “establish”. As Nicholas Bagley writes:
: King v. Burwell: “As the ACA uses it…
‘establish’ means ‘[t]o make or form; to bring about or into existence’…
And every single state has taken steps to bring its state exchange into existence and make it function, one example of which being where exchange coverage and state Medicaid coverage meet:
…that it may choose to switch to a state operated exchange, should that be necessary to preserve subsidies after a potential ruling adverse to these subsidies through the federally facilitated exchanges under King v. Burwell. The letter leaves open whether or not this is something Pennsylvania will do as well as the terms of a potential jointly operated exchange. Of course, all exchanges (federal or state) are jointly operated in the functional sense, since the back-of-the-house operations have to merge state-specific Medicaid enrollment standards with nationalized-standardized federally-operated exchange applications and subsidies.
On one level, I just don’t get it. Every exchange, to a certain extent, is state operated and federally operated…. Post-Burwell… other states [could] announce and then implement hybrid exchanges. But isn’t that what they already are functionally?