Professors Argue in Favor of Tax Subsidies for Health Insurance Purchased on Federal Exchanges
In Amicus Brief Filed with the U.S. Supreme Court, Professors Gillian Metzger '96 and Thomas Merrill Argue that Established Principles of Federalism Support Affordable Care Act Tax Subsidies for Federal Exchanges
New York, January 29, 2015—The IRS can extend tax credit-subsidies to help cover the cost of health insurance policies purchased through marketplaces established by the federal government under the Affordable Care Act, Columbia Law School professors Gillian E. Metzger ’96 and Thomas W. Merrill argue in an amicus brief filed with the U.S. Supreme Court on Jan. 28.
Metzger and Merrill filed their brief in King v. Burwell, a case scheduled to be heard by the high court on March 4. The case deals with one of the central tenets of President Obama’s signature health care legislation: federal tax credits subsidizing the purchase of insurance by people who otherwise could not afford it.
The question before the justices is whether the tax credits can be used to subsidize purchase of insurance only on state marketplaces or also on federally operated marketplaces in states that opted not to create one on their own. The federal government runs the health insurance marketplaces—called “exchanges”—in 34 states, covering more than 5.3 million Americans.
The Obama administration argues the tax credits extend to the federal exchanges. Over 85 percent of those purchasing health insurance through a federal exchange have been approved in advance for tax credits, with the credits covering over three-fourths of the cost of their insurance premiums.
Metzger and Merrill, who are joined by Yale Law School Professor Abbe R. Gluck and University of Michigan Law School Professor Nicholas Bagley, with James Feldman as counsel of record, argue that well-established federalism doctrines of statutory interpretation support the U.S. government’s position in the case. Under these doctrines, courts must be certain of Congress’ intent before reading a federal statute as overriding the usual balance of federal and state powers—certainty that the brief contends is lacking in the ACA.
“The ACA is a typical example of the other standard model of cooperative federalism—a federal-state regulatory program,” the professors further argue in their brief. “Such programs, like the ACA, offer the States the opportunity to administer or enforce a federal program, but provide as well for a federal fallback if a State chooses not to do so. Crucially, in such cases, the State’s choice determines only whether the program is implemented by a State or by a federal agency; it will be fully implemented in either event.”
Metzger, the Stanley H. Fuld Professor of Law, is co-counsel on the brief in her role as faculty director of the Law School’s Center for Constitutional Governance. She is an expert in administrative and constitutional law, with a specialization in federalism.
Merrill, the Charles Evans Hughes Professor of Law, is an expert in property and administrative law and former Deputy Solicitor General for the U.S. Department of Justice under Presidents Ronald Reagan and George H.W. Bush.