Supreme Court of the United States

David King, Petitioners v. Sylvia Burwell

June 25, 2015576 U.S. 473

Summary

The Supreme Court held that Section 36B of the Internal Revenue Code makes Affordable Care Act premium tax credits available to individuals enrolled through Exchanges established by the Federal Government as well as those established by States. Declining to apply Chevron-style deference because the availability of the credits is a question of deep economic and political significance that Congress would not have delegated to the IRS, the Court found the phrase 'an Exchange established by the State under [42 U.S.C. § 18031]' ambiguous when read in context, and concluded that the Act's structure and purpose—avoiding market-destabilizing 'death spirals' in States with Federal Exchanges—compel the broader reading, affirming the Fourth Circuit. Justice Scalia, dissenting, joined by Justices Thomas and Alito, argued that the plain text unambiguously limits credits to State Exchanges and accused the Court of rewriting the statute to save a favored law.

Holding

  • Whether the agency's interpretation of Section 36B is entitled to deference under the two-step Chevron framework.. No. This is an 'extraordinary case' in which the Court must determine the correct reading of Section 36B itself, because the tax credits are among the Act's key reforms involving billions of dollars and millions of people, making their availability a question of deep 'economic and political significance' central to the statutory scheme that Congress surely would have assigned expressly if it wished to delegate it—especially to the IRS, which has no expertise in health insurance policy.
  • Whether the phrase 'an Exchange established by the State under [42 U.S.C. § 18031]' is unambiguous.. Read in context and with a view to its place in the overall statutory scheme, the phrase is properly viewed as ambiguous: it may be limited to State Exchanges, but it may also refer to all Exchanges—both State and Federal—at least for purposes of the tax credits.
  • Whether Section 36B allows tax credits for insurance purchased on Federal Exchanges.. Yes. Section 36B allows tax credits for insurance purchased on any Exchange created under the Act, whether established by a State or by the Federal Government.

Docket 14-114

Cited authorities

Cited by

Read full opinionPDF