King v. Burwell

Majority reasoning

The majority, led by Chief Justice Roberts, found that this was an "extraordinary case" not suited to routine deference to the IRS's interpretation under Chevron, because tax credits worth billions of dollars are too significant a question to have been implicitly delegated to a tax agency with no health policy expertise. Reading the phrase "Exchange established by the State" in isolation seemed to favor limiting credits to state exchanges, but read in the context of the whole statute, the phrase became ambiguous: other provisions assume "qualified individuals" and tax credits exist on every exchange, including federal ones, and the statute's definition of "Exchange" ties federal exchanges back to the same statutory section as state exchanges. Because the guaranteed-issue and community-rating insurance rules apply nationwide but depend on the coverage mandate and tax credits to avoid an economic "death spiral" of rising premiums and shrinking enrollment, the majority concluded Congress could not have intended tax credits to vanish in states with federal exchanges. The majority acknowledged the ACA contains sloppy drafting, partly from the rushed legislative process used to pass it, and said courts must read statutory language in context rather than mechanically applying rules against redundant language. In footnotes, the majority directly rebutted the dissent's specific counterarguments, including its claims about "qualified individuals," the "such Exchange" language, and the structure of Section 36B, saying the dissent's reading would leave many statutory provisions nonsensical for federal exchanges.

Dissent reasoning

Justice Scalia, joined by Justices Thomas and Alito, argued that the phrase "Exchange established by the State" plainly and unambiguously means an exchange set up by one of the 50 states or D.C., not by the federal Secretary of Health and Human Services, who is expressly excluded from the statute's definition of "State." The dissent contended that the majority's reading strips the words "by the State" of any operative effect not just once but across seven separate provisions of the Act, violating the basic principle that courts should give effect to every word Congress used. It argued that other statutory provisions actually confirm the distinction between state and federal exchanges, such as separate funding streams and separate authorizing sections, and that Congress deliberately used the general term "Exchange" elsewhere when it meant both types, showing the specific phrase "established by the State" was intentional. The dissent maintained that even if withholding credits from federal-exchange states could destabilize insurance markets, that would show a flaw in the law Congress wrote, not a license for the Court to rewrite the statute's text, and it warned that this decision continues a pattern of the Court bending normal interpretive rules to preserve the Affordable Care Act.