Tax Credits on Federally Created Exchanges: Lessons from a Legislative Process Failure Theory of Statutory Interpretation

Opponents to the Patient Protection and Affordable Care Act (ACA or Act) have mounted yet another seemingly formidable challenge to basic provisions of the Act, focusing on whether the Act authorizes insurance premium tax credits for individuals who obtain insurance on an American Health Benefit Exchange (Exchange) established by the federal government. The argument against construing the Act to allow such tax subsidies depends largely on applying technical tools of statutory interpretation, usually associated with the Textual school of interpretation, to various provisions of the Act to discern that the best objective reading authorizes premium tax credits only to individuals who purchase insurance on Exchanges established by the state in which the Exchange operates. This issue has the potential to destabilize the operation of the ACA in the 36 states that did not set up their own Exchanges