Both courts focused on the language of the statutory provisions. The difference between the two courts’ conclusions turned on disagreement over whether 26 U.S.C. section 36B(b)(2), which establishes the amount of premium assistance that is to be provided, unambiguously directs that only taxpayers who purchase coverage through a state-run plan receive premium assistance. More specifically, the courts of appeals disagreed about the impact of surrounding statutory provisions on the proper interpretation of section 36B.The ACA Provisions at IssueUnder section 36B(a), an “applicable taxpayer” (defined as a taxpayers whose income is between 100% and 400% of the poverty line) is entitled to a tax credit “equal to the premium assistance credit amount of the taxpayer…” The term “premium assistance credit amount” is defined in section 36B(b)(1) as the sum of monthly “premium assistance amounts,” as defined in section 36B(b)(2).

Specifically, ACA section 1311 provides that tax credit subsidies shall be available for insurance purchased on an Exchange “established by the state.” 26 U.S.C. § 36B. Similarly, more employers will be subject to penalties if the tax credits are available for insurance on federally facilitated Exchanges. Certain large employers are subject to penalties if one or more of their employees enroll in a qualified health plan upon which a tax credit is allowed or paid.

Specifically, ACA section 1311 provides that tax credit subsidies shall be available for insurance purchased on an Exchange “established by the state.” 26 U.S.C. § 36B. Similarly, more employers will be subject to penalties if the tax credits are available for insurance on federally facilitated Exchanges. Certain large employers are subject to penalties if one or more of their employees enroll in a qualified health plan upon which a tax credit is allowed or paid.The Internal Revenue Service (IRS) promulgated regulations interpreting section 1311 to make financial subsidies available to anyone “enrolled in one or more qualified health plans through an Exchange,” which includes state and federal marketplaces.

The Act Defines Exchanges Initiated by States, or Facilitated by the Federal Government, Simply as “American Health Benefit Exchanges.” The Act does not Distinguish between the Two and 26 U.S.C. § 36B Cannot Be Read to Allow Such a Distinction Where the Act Itself Does Not Create Such a Distinction.This is how Iopened Part III of my amicus brief. In formulating this argument, I had asked myself, “Does the main body of the Affordable Care Act support the challengers' argument?”

As with CSR payments, premium tax credits are estimated and paid in advance to insurance companies so they can reduce individuals’ premiums by a corresponding amount.2 The court found that the ACA contains clear language making a permanent appropriation for the premium tax credits. Section 1401 of the ACA, which authorizes the credits, is codified in the Internal Revenue Code at 26 U.S.C. § 36B. It provides that lower-income people buying insurance on the exchange “shall” receive the credit.

As with CSR payments, premium tax credits are estimated and paid in advance to insurance companies so they can reduce individuals’ premiums by a corresponding amount.2 The court found that the ACA contains clear language making a permanent appropriation for the premium tax credits. Section 1401 of the ACA, which authorizes the credits, is codified in the Internal Revenue Code at 26 U.S.C. § 36B. It provides that lower-income people buying insurance on the exchange “shall” receive the credit.

The Act initially provides that tax credits “shall be allowed” for any “applicable taxpayer.” 26 U. S. C. §36B(a). The Act then provides that the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act [hereinafter 42 U. S. C. §18031].”

Both the majority opinion of Chief Justice Roberts and the dissent of Justice Scalia relied heavily on bankruptcy precedents in support of their interpretations of the PPACA.In King v. Burwell, No. 14-114 (June 25, 2015), the Supreme Court had to decide whether tax credits critical to the operation of the PPACA are available nationwide or only in certain states. In particular, the parties advanced two possible interpretations of the statutory language “an Exchange established by the State” in 26 U.S.C. § 36B(b)(2)(A). The government argued that “Exchange established by the State” refers to an insurance exchange operating in a particular state, whether the exchange was set up by the state government or, alternatively, by the federal government after the state refused to establish one.

The Secretary of Health and Human Services MerelyFacilitates the Establishment of Exchanges. The States and Only the States Determine, by Their Actions, Inadequate Actions, or Inactions, How Exchanges Are to be Established in Their States. . . . [T]he disputed language in the tax-credit statute, i.e., 26 U.S.C. §§ 36B(b)(2)(A) and 36B(c)(2)(A)(i), is "an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act." Is this disputed language susceptible to an interpretation other than that given to it by the petitioners, such as the interpretation given to it by the IRS, that "an Exchange established by the State under section 1311" includes an Exchange established by the Secretary of HHS under section 1321 of the Affordable Care Act?

The IRS, by rule, provides that taxpayers may claim these credits as premium assistance for insurance purchased in all exchanges, state and federal. The statutory authority for such credits resides in IRC §36B. In a sub- sub-section of §36B, where the measure of credits is spelled out, an un-snipped drafting thread sticks up.