eligible for health insurance from the government but there's a question of whether they are better and eligible for coverage better yes one of those mr hurst who would have to if i would refer you to the joint appendix  to look into it and that's true and but of course there has been fact finding by lower courts in an adversarial system i don't believe the court does its own i don't think it was ever brought up in the says yes it with the usual clarity of the i r s code making clear that you are only disabled from receiving subsidies if you have actually enrolled in a veteran's health services and in late june she's obviously subject to the individual mandate well in advance of that by virtue of the i r s rule she would have to spend eighteen hundred dollars per year for health insurance by virtue  section thirteen eleven if you're going to elaborate on that i would appreciate your in your lab ration i've read and this statute is like the tax code more than it's like the constitution there are defined terms and the words you just use concern a defined term as i read the definition there's a section definitions and it says quote vote term exchange it means quote an exchange a stablished under thirteen eleven and thirteen eleven says an exchange shall be a government agency etc that is established by a stake those are the definitions then you look to thirteen twenty one and thirteen twenty one says if a state does not set up that exchange then the federal quote secretary shall establish and operate such exchange so it says the secretary is to establish an operate such exchange the only kind of exchange to which the act refers which isn't a says quote an exchange a stab by a state under thirteen eleven that's the definition so that statute tells the secretary set up such exchange namely a thirteen eleven stake exchange there's nothing else in this statute correct so that's through out what they're talking about and so what's the problem as your honor just said it tells the secretary to establish such exchanges and what thirty six b turns on is whether the state or the secretary of stablish uses the same terminology that it's used in fifteen times in this statute namely the terminology in the definition is an exchange established by a cannot can i offer you a sort of simple daily life kind of example which i think is linguistically equivalent to what the sections here say that justice pryor was talking about so i have three clerks mr carven their names are will and elizabeth and amanda ok so my first clerk i say will i'd like you to write me a memo and i say elizabeth i want you to edit will's memo once he's done and then i say amanda listen if will is too busy to write the memo i want you to write such memo now my question is if will is too busy to write the memo and amanda has to write such memo should elizabeth at the memo you run a different shop than i do if that's because in my chambers if elizabeth did not edit the memo elizabeth would not be performing her function another words there is as a substitute and i've set up a substitute and then i've given i've given instructions elizabeth you write you edit will's memo but of course of amanda writes the memo the instructions carry over elizabeth knows what she's supposed to do she's supposed to edit amanda's memo to it and in your chambers you're agnostic as to whether will this before amanda writes but the key point here is under section thirteen eleven congress was not agnostic as to whether states or said this is a great memo who wrote it would the answer be it was written by well because amanda stepped into will shoes that was my first answer question really does depend on context and it depends on an understanding of the law as a whole and whether they were it not stead i agree with that so it's not that the simple four or five words because the four or five words in my example it's obvious that elizabeth should at the memo it's the whole structure and context of the provision that suggests whether those instructions carry over to the substitute isn't that we implore you to examine words in the context of the act as a whole because our argument becomes stronger for five reasons to respond to justice briar's point he says such exchange connotes that it's the same person doing it but look at the provision on territorial exchanges it says territories can establish such exchanges and then it says in shall be treated as a steak yes it does say some no no it's not a question of connotation it is a question and the thing that it is a stablished thing for the state is defined as an exchange established by the state about a person from mars who is literal which i usually am not but a literalist i think would have to read it that way but if you're not a literalist well at least you could read it that way now you want to go into the context if you want to go into the context at that point it seems to me you argument really is weaker exchanges fall apart nobody can buy anything on them you know the arguments you read the briefs nobody could there no customers employers don't have to pay penalties as long as they use just people from virginia but one maryland person comes you know all those arguments under the how is the context the port well again under the literalist or non literalist interpretation saying that h h s of the stablish such a change doesn't suggest that the state has a stab  subject changed if there was a state if we end it you would be in that regard it's just if i could finish my answer just as prior you look at a parallel provision where they used precisely the same language and they said and shall be treated as a state at language which is choice the state had was establish your own exchange or let the federal government establish it for you that was the choice if we read it the way you're saying then we're going to read a statute as intruding on the federal state relationship because then the states are going to be coerced into stablish in their own exchanges and you say oh no th can't be coerced but let's go back to what justice briar was talking about in those states that don't their citizens don't receive subsidies we're going to have the death s that this system was created to avoid states are obligated insurers are obligated to make sure that in their states whether they are part of this program or not that they have guaranteed coverage that twenty six the children are covered till the twenty sixth and that they base their costs on community ratings so if they have to do that then costs are going to rise on every insurance every insurance offered in the country in those thirty four states three or six of or nine of your states will have they would have to lose all of their medicaid money tell me how that is not coercive in an unconstitutional way and if it is coercive in an unconstitutional way on just i think it was last term we said that that is a primary statutory command if we read a statute in a way where we filmed in hinge on the basic said it last year in a footnote knowing bung there this there the federal government was taking away a police power here all the federal government's doing is saying you want billions of free federal dollars that's hardly invading state sovereignty and it's the kind of routine funding condition th has upheld countless times but that has been met let me say that from the standpoint of the dynamics of federalism it does seem to me there's something very powerful to the point that if your argument is  accepted the states are being told in there create your own exchange or will send your insurance market into a death spiral will have people pay the men dated taxes which will not get any credit on  subsidies cost of insurance will be sky high but this is not coercion it seems to me that under your argument perhaps you will prevail in the brain words of the statute there's a serious constitutional problem if we adopt two points just as any one is the government's never made that argument number two i don't think sometimes we think of things the government doesn't well i certainly hope you do in this case but not not on this question but what i'm trying to quite seriously just was convey is if this was unconstitutional then the medicaid statute that this court approved in n f i b would be unconstitutional darwin was clear that what would the consequence of unconstitutionality  be very often you have an ambiguous provision could be interpreted one way or another way if interpret it one way is a little constitutional you interpret it the other way correct but do we have any case which says that when there is a clear privy if it is unconstitutional we can rewrite it and that and that is there any case we have that says no your honor and that that was really my point justice can't think about the consequences when of the medicaid deal is being course of twenty two states have said no to the medicaid deal that has created a bizarre anomaly in the law that if people making less than the poverty line are not available to any federal funds to help them with health insurer i fully understand that but i think the court and the counsel for both should confront the proposition that your argument raises a serious constitutional question you know i'm not sure that the government would agree with that  point i want to make on the straight up constitution now is if this is unconstitutional then all of the provisions in the u s code that say the states if you do something for no child left behind but if you will that i'm not sure if you know in south carolina versus do step stablish their limits and their condition is not related to that here the condition is perfectly related to it's become if you want to day you can you can have your program if you want it and if you don't there's a fallback with the federal program indefinite to pick up the pattern it's the pattern of the clean the statute says you can have their teen twenty one then you get the various risk consequences that's why this is much less risky a deal for congress and what distinguishes it from medicaid is the dissenting opinion and  pointed out in medicaid congress is plain all in take it or leave it if they turn down the deal then medicaid is completely thwarted here if they turn down the subsidy deal they still get the valuable benefits of an exchange and there's no said without the subsidies driving demand within the exchanges insurance companies would have absolutely no reason to offer their products through exchanges and then you said the insurance exchanges cannot operate as intended by congress subsidies that is entirely true that would have operated as intended because congress intended all fifty states to take this deal so little why create thirteen twenty six at all obviously they thought that some states wouldn't but they thought it was loaded no one's going to visit the program if there are no subsidies because not enough people will buy the programs to stay in the exchanges that is demonstrably untrue and not reflected anywhere in the legislative legislative history quite clearly contradicts that many senators got up and said there are very valuable benefits to the exchange one stop shopping amazon as president obama said the government came in the last case and told you these two things operate quite independently we don't need exchange without subsidies in contrast there's not a scintilla of legislative history suggesting that without subsidies there will be a death spiral not of not  purpose that your oath this bill because states had experimented with this in those that didn't have subsidies or other other provisions of the act and didn't survive they didn't you said  yourself in the prior case you know the prior case was about the individual mandate the government came in and said the individual mandate is necessary to affect their spirals no one in the findings in congress or anywhere else suggested that subsidies were available will subsidies reduce the number of my people noble and i've been able to miss that the reverse you're talking about congress hiding borrowing the phrase of one of my colleagues a a  a huge thing in a mousetrap ok because do you really believe that states fully understood that they were not going to gets their citizens who are not going to get subsidies to flee let the federal government what senator said that during the hearing same amount of senators who said that subsidies were available on h h s exchanges which is not they didn't deal with it in the legislative history just as they didn't deal with medicaid because the statute was quite clear let's talk about the context again just to sort of my ear the context is the only provisions in the act establishing any limits on the subsidies is found in thirty six b so it's not a mouse hole it's the place you'd expect to find it it's the only place  given have been we've heard talk about this other case did you when that other case appreciated too to respond we've already talked about context section thirteen eleven is a key part of this context it says in the strongest possible terms we want states to run these exchanges if you give unconditional subsidies then of course there is absolutely no incentive for states to do it and you will fundamentally undermine that distinct statutory purpose whereas if you condition subsidies congress accomplishes both of its goals widespread subsidies plus the state run exchanges in terms of terms of art again there is language in the statute which says exchanges exchanges under the yet those phrases naturally encompass both h h s exchanges and status stablished exchanges and yet the solicitor is coming here to tell you that a rational english speaking person intending to convey subsidies available on h h s exchanges use the phrase exchanges established by the state he cannot provide to you any rational reason why somebody trying to convey the former would use the latter formulation mr carden wanted to take an extra ten minutes we'll give you a little bit more of a chance to talk ok fine now then i'll ask a question well you're going to ruin my ten minutes with a no i mean let's go back to this question of where where congress put this thing through this putting aside constitutional issues i mean there's at least a presumption as we interpret statutes that congress does not mean to impose heavy burdens and reckoning and choices on states unless it says so awfully clearly and here and this goes back to what justice ginsburg was saying there's really nothing clear about this i mean this took a year and a half for anybody to even notice this language and as justice ginsburg said it's put in not in the place that you would expect it to be put in which is where it says to the choice of the states here the choice you have it's not even clued in where the statute defines who a qualified individual is or whose entitle it's to get the subsidies rather it comes in in this technical formula it's directed to the department of the treasury saying hell much the amount of the subsidy should be and that seems to be it both banks no sense from congress point of view and terms of our own point of view in terms of interpret ing statutes that's not the clarity with which we require the government to speak when it's upsetting federal state relations like this i must respectfully disagree for three reasons the justice kagan in the first place of course you where else would you expect a tax credit except in the tax code that's where this was you wouldn't put forty two us c which has nothing to do with taxes it's the only place where exchange is limitations placed you have three audiences here not just states you have to tell taxpayers what they're entitled to you have to tell insurance companies when these subsidies are available and you have state so you have to put it in thirty six b so the argument i guess gets the government is making is what you should have done is put half of it thirty six b and half of it in thirteen twenty one which of course would have confused everybody thirty six b would say such exchanges period then you go to thirteen twenty one and say when we said exchanges and thirty six b if i were a state official and i was trying to decide whether my state should establish an exchange and i wanted to know whether individuals who enrolled in the plan on my possible state established exchange would get a credit where would i look exactly the basic thesis here is these exchanges don't work without subsidies you've read thirteen eleven you've read thirteen twenty one now you're going to go find out where the subsidies would look is a provision of the statute that talks about what is it coverage months for purposes of this subsection which by the way isn't even the right subsection but whatever cut that where i would look is in is in where it talks about what a coverage month is but but your honor i've already described the difficulties of putting in part of it in thirteen twenty one right because then you would create this bizarre tax credit provision which is only half true and you wouldn't tell taxpayers insurance companies so i believe that the complete answer but the other practical point i'd like to make is they had three years to implement this and no one thought the states were going to have to make a decision overnight if bizarre notion that states were somehow able to read a statute or two or to read a regulation is simply i mean i haven't i really want to hear what you're going to say your five to ten minutes and if you want only if you want i would be interested in your responses to the government brief if you read the words of the stab post by the state without reference to the technical definition as you wish this isn't just about the taxes means employers in virginia don't have to make policy don't have to don't don't have to give policies but if they have one maryland worker they do it means that they never can tighten up their medicaid regulations never in thirty four states but of course in the others i cam it means that there's no qualified person ever to buy anything on an exchange established by the secretary for the state and they have two or three other that have nothing to do with taxes all of which supports their argument that you have to read this phrase technically according to the definition and that's the basic point i tried to summarize it do as you wish i just want you to have five or ten minutes to answer than and the first point is there are no i'm not going to clock out if you get there are no if the first point i'd like to make is there's no anomaly stemming from our interpretation of thirty six big the government agrees with that their biggest anomaly is this qualified individuals point about how they would be nobody on h h s exchanges the solicitor general is not going to stand up here and tell you that if we prevail in our interpretation of thirty six b they will be a blog's by the logic of that opinion to empty out h s exchanges so we all agree that there is no connection between thirty six b and the qualified individual that's point one point two is if you want anomalies their interpretation of the statute requires thirty four states today to lose all medicaid cover up why is that because the provisions one sixty four a through sixty six a of the government's brief there are various requirements that the state on pain of losing all of its medicaid fun must coordinate between the status stablished exchange the state agency for chip and the state agency for medicaid in terms of secure interface and enrollment now that makes perfect sense of exchange established by the state means what it says but they think  you had an exchange with subsidies which makes sense right you want to coordinate the two and that's exactly what this provision means under our interpretation until you have an exchange with subsidies the states will be frozen the government says that thing ended when jerry one twenty fourteen that's a figment of their imagination it's nowhere in the statute plus which it makes no sense before twenty fourteen the states were powerless to have an exchange with subsidies right they couldn't do it so there was a three year freeze on medicaid but they were powerless to get outta after twenty fourteen if they don't want to have their medicaid frozen all they have to do is establish an exchange so it's a less harsh restriction on state plus which gives them another incentive in addition to the subsidies to create the state exchange which is the purpose and once again getting thirteen eleven i don't know as to yeah maybe somebody would from another state if you had an employee that lived in another state maybe would be subject to the employer mandate why is that an anomaly congress like the employer mandate of course they wanted to expand they also never thought it would really happen because again what they thought was going to happen was there wouldn't be neighboring states purposes of the act just like in utility air because the word pollutants didn't work with one section you don't spread it like a virus throughout the rest of the act you clear it not provisions were to give in when there's any litigation so i think i think i was alongside yes i think i'm right that justice breyer question about anomalies which are replete in the act under your interpretation do not talk about what i think is one of the most glaring ones which is this qualified individuals thing that you are essentially setting up a system in which the federal exchange is that there will be no customers and in fact there will be no products because section thirteen eleven says that the exchange plans available to qualified individuals and then the next section says that qualified individual means an individual who resides in the state that established the exchange so under your theory a federal exchanges don't qualify as exchanges to stablish by the state that means federal exchanges have no customers which of course is not the reading that the government's giving to it because they're not going to tell you that's that because they don't share your theory no no no you don't know at the result or no me be as clear as i can if we prevail in this case they are not going to empty out the h h s exchanges because they understand that there are numerous defenses even if you interpret established by the state literally in the qualified individuals provision  number one defense they will use is it says you have to be a qualified individual with respect to an exchange as justice briar pointed out this statutory definition of exchange is a thirteen eleven exchange so they're only talking about state exchanges not these h h s exchanges and it is in section thirteen twelve which immediately follows thirteen eleven before thirteen twenty one number two qualified individual doesn't mean that that means you're guaranteed ac it doesn't mean if you're not qualified you're absolutely denied access we know that from the illegal alien vision which says illegal aliens are neither qualified individual nor eligible for some but look at that look at the prisoner pr which says prisoners shouldn't be treated as qualified individuals so under your theory this statute effectively said that prisoners should be able to enroll on federal exchanges that makes no sense it makes perfect sense to say the states get a choice think about somebody who's in prison in february they're getting out in april they got to buy insurance on the individual mandate so if he said nobody who's incarcerated can buy insurance that means they wouldn't be able to buy insurance during the relevant roman period it makes perfect sense to give states the flexibility to say as to those incarcerated principles you can make them available for exchanges but under illegal aliens we don't want to which is why we're saying they are n qualified nor eligible even if justice even if you don't find that the most pristine logic to be applied to a statute remember we are interpreted in statute to avoid an absurd result and it is a basic principle of statutory construction that text the particular context the more general context try to make everything harmonious with everything else i think you said even at the very beginning of this argument as we were going back and forth about my hypothetical but of course cont matters and context night make all the difference with respect to what those five words mean and i think what we're suggesting is that if you look at the entire text it's pretty clear that you oughtn't to treat those five words in the way you are  h s exchanges you have essential a good section thirteen eleven strong preference for state exchanges what will happen is precisely what did happen under the i r s rule two thirds of the state are say no we're not going to undertake this thankless task of running these exchanges with no incentives to do so so yes if what i have here in terms of what the statute means is thirty six be quite clearly saying the exchanges are available only on states i have thirteen eleven explaining why they limited subsidies to that and there was no contrary legislative history at all what did they have an a textual reading of thirty six b which they can't explain why anybody would have used those words if they want exchanges a rule that completely undermines the purposes of set of thirteen eleven and no supporting legislative history so under all the legal materials of this court normally used to discern what statute means we clearly prev general but really you'll have the extra ten minutes as well thank you mr chief justice and made please the court standing has been raised so let me start by telling you where we stand on standing and then i'd appreciate the opportunity after that to summarize what i think are the two key points in this case  to standing the question of grace case or controversy question turns on whether any of the four petitioners is liable for the tax penalty for two thousand and fourteen now this case was litigated in the district court in two thousand and thirteen based on projections on the part of each of the four petitioners but they would earn a certain income in two thousand and fourteen a fall declaration saying that with respect to two of the four the projections were of their income were such that they would qualify for the on affordability exception and they wouldn't have standing with respect to the other two their projections were such that they wouldn't qualify for the on affordability exception and they would have standing but those are projections in two thousand and thirteen about their income in two thousand and fourteen two thousand and fourteen is now come and gone and we know that we don't know but petitioners know whether any of the four have in fact are in fact liable for the tax penalty and that will depend on whether they're in their actual income in two thousand and fourteen match their project mr carvin said there was fact finding about this i'm afraid that's not correct that the petitioners that the petition is did file a motion for summary judgment but the case was decided on the basis of the government's motion to dismiss before discovery and without any fact finding i'm assuming because mr carbon has not said anything about the absence of a tax policy that at least one of the four has and is in fact liable for a tax penalty but that's the key standing question now with respect to the veterans point your honor if it is the case  mr carden tells us that mr hurst was a veteran for only ten months then i think he's correct he would not qualify for be a health care because you generally have to serve two years so that's where we are in standing now if i could turn to the m know it will depend on whether as a factual matter one of the four has is in fact liable for the tax penalty for two thousand and fourteen and that's information that is not in the government's possession it is counsel and with us i should make one more point respected two thousand and fifteen there were no projections there's nothing in the record about the possible income of any of the petitions for two thousand and fifteen so there's really nothing that would establish a case or controversy for two thousand and fourteen well you're surely not raising the standing question with us here for the first time at oral argument are you well mr chief justice as i said that based on the projections it is our it was our understanding that at least one of the four would be liable for a tax penalty the question of standing has been raised and i've tried to identify for the court what i think is the relevant question which is whether any one of the four has in fact is in fact liable for a tax penalty because this is this is on a motion to dismiss right well that's correct your honor but it all that does also go to this court's jurisdiction because if there's no if none of the four is liable for a tax penalty for two thousand and fourteen there just isn't a case or controversy none of them is liable to know there's no injury and so i do think that's ultimately the relevant question here with respect to standing i don't think there's a question about veteran status but i do think that's the relevant question isn't the question before the for us as to standing whether the district court correctly held in the motion to dismiss context that there was standing that may not be the end of the matter but don't we have to use them that's before us well that that may be correct yes but then you and you might alternatively think about this is a question of mootness i guess in that you know based on the projection there he makes a representation that at least one of the four is has it was liable in two thousand and fourteen and is liable in two thousand and four will be liable in two thousand and fifteen so i guess i mean we know at least one of them won't because that's what i'm saying about that is i'm actually going to step further than that just sort of more given that there hasn't been a i'm willing to accept the absence of a representation as an indication that there is a case or controversy here  and so that's why mr chief justice we haven't raised standing and that's what but i do think that the key question is whether one of the four is liable for a tax penalty you have to have that to have a case or controversy ok if i could now let me please turn to the merits and summarize what i think are the two key points first our reading follows directly from the text of the actual clickable provisions and it's really the only way to make sense of both section thirty six b in the rest of the act texturally their reading for who produces an incoherent statute that doesn't work and second our reading is compelled by the act structure and design their reading forces h h s to establish rump exchanges that are doomed to fail it makes a mockery of the statutes express status expressed textual promise of state flexibility it precipitates the insurance market desk by rules of the statutory findings specifically say the statute was designed to avoid and of course it revokes the promise of affordable care for millions of americans that cannot be the statute that congress intended course it could be i mean it may not be the statute they have founded the question is whether it's the statute that they wrote i mean you know there are no provisions in the statute that turn out to be ill ill considered a new ill conceived so it's not the statute that they wrote and the reason it's not the statute that they wrote i think i want to actually start if i could picking up i think on a variation of the hypothetical justice  asked in petitions brief they throw down the gauntlet with respect to a hypothetical about airports that the state statute requires a state to construct an airport says the federal government cell construct such airport of the state doesn't and no one would think that the federal government's airport was airport constructed by the state but what i would say to that is that if those statutory provisions were can join with a provision that said airplanes may only land at airports constructed by the state that you would conclude immediately that what that that that sense and we will we will twist the words as necessary to make it make that can't be the rule that isn't the rule but the will is that you read states that you don't read statutory provisions in isolation you read them in context the rule is that you read them in order to ensure that the statute operates as a harmonious whole you can read them so they don't render statutory provisions in effect if you read them to promote it where there will stasi alan i mean if you acknowledge that that all of what you're saying only applies where there are alternative readings that a reasonable you pick the one that will do all that and there it is say there yes but but if if it can only reasonably need one thing it will continue to be that one thing even if it has untoward consequences for the rest of the statute though with respect to this statute first let me i want to make two points answer me in principle i mean is it not the case that if the only reasonable interpretation of a particular provision produces disastrous consequences in the rest of the statute it nonetheless means what it says is that true or not i think there are there are a couple of limitations on that principle the first is that if what you have a situation in which the that it creates conflict within a statutory scheme and the courts got to do its best to try to harmonize and reconcile the provisions well so i disagree with that and you have a single that of brown and williamson the court said look the definition of drug and drug delivery and device would actually seem unambiguous lead to cover tobacco but when you read that provision in context in this in this and considering the full scope of the regulatory regime it can't possibly mean but let me let me likely work through the text here because i do think i can show you that there is a quite reasonable reading of the statutory text that allows you to affirm and require to affirm the government's position which really before we get to immersed in a number provisions of this could you respond to a question that was asked during mr carvins argument if we in da petitioners interpretation of this act is it unconstitutionally coercive so that here's what i would say about that yes alito i think that it would certainly be a novel constitutional question and i think that what i'm not prepared to say to a court today that is unconstitutional it would be my duty to defend the statute and on the story of new york versus united states i think we would do so but i don't think there's any doubt that it's a novel question and if the court believes it's a serious question i because it it does seem to me that if the petitioners argument is correct this is just not a rational choice for the states to make and that they're being coerced so what and that you then ha the standard of constitutional borden's well what i was going to say justice kind he is to the extent a court believes that this is a serious constitutional question and this does rise to the level of something approaching coercion and i do think the doctrine of constitutional  becomes another very powerful reason to read the statutory text our way because i do think and i do think with respect to the point that john is making number it's not just it's not just a situation in which  there's on risk conditions consequences for state residents it's also a profound problem of notice here that you know if you read petitioners if you take the titian is reading of a statute then the idea that states were given a you can't possibly justify this adequate notice to the states almost certain a general rule i mean ask you this about notice we get lots and lots of amicus briefs from states and we got to amicus briefs from states here thirty four states i think is that's the number of states that declined to where it failed to establish a state exchange correct now if they were all caught off guard and they were upset about this you would expect them to file on the meekest brief telling us that but actually of the thirty four only six of them signed the brief that was submitted by a number of states making that argument twenty three states twenty three jurisdictions submitted that brief seventeen of them are states that established state exchanges only six of the states that didn't establish state exchanges signed that brief time you'll kill for that so i guess i'd make two points about that justice alito first you've got twenty two states there are states in both camps all of whom told you that they didn't understand a statute that way and with respect to the other eight states that filed the amicus brief on the other side i actually think it's quite an important point that goes to their understanding of what this act did remember this is an iris rule that we're talking about here and then iris put out a notice of proposed rule making saying this is we intend to do and several of these states oklahoma indiana nebraska they filed rulemaking comments in that in that proceeding and if you look at those who are making comments you will see that they address a number of issues and they say nothing nothing about the issue just before the court now so if they really understood the statute as the nine subsidies in states that did not set up their own exchanges that would have been front and center in their bill making comments but they said nothing about it and i think that tells you a good deal about where what everybody understood that the statute was well there's another point on on notice on this punter's argument that seems curious to me usually when this argument comes up a state has signed up for a federal program and then they say oh my gosh we didn't realize what we had gotten ourselves into but here it's not too late for a state to establish an exchange if we were to adopt petitioners interpretation of the statute so going forward there would be no harm well let me address that directly and then i'd like to make a broader point about statutory context and response not directly of course i don't i don't think it's possible to say there would be no harm that the tax credits will be cut off immediately and you will have very significant very adverse effects immediately for millions of people in many states i said durrance my i said going forward and then after after the current tax year and then going for and i would it not be possible if we were to adopt petitioners interpretation of the statute to stay the mandate until the end of this tax year as we have done in other cases where we have an interpretation of the constitution or a statute that would have very disruptive consequences such as the northern pipeline northern pipeline is an example of doing that and of course you know it will be up to a court to decide that whether has the authority to do that i will say this does seem different than northern pipeline to me because this is a money going out of the federal treasury which is a different scenario but if the core obviously if that's where the court's going and that's what the court thinks the proper disposition is that would reduce the disruption but i don't but i i think it's another important point to make here just as a practical matter the idea that a number of states all the states are significant number going to be able in the six months between one of the season in this case will come out and when the new the new year for insurance purposes will begin will be able to set up exchanges get them up up and running and get all the approvals done i think is completely unrealistic and only if you think it will for a just to give you an example of the current timeline justice ginsburg the in order to be in order to have an exchange approved and insurance policies on the exchange ready for the two thousand and sixteen year most approvals have to occur by may of two thousand and fifteen ok so that gives you a sense of the of the timeline that that h h s is operating under now what about what about congress you really think congress is just go sit there while all of these disastrous consequences ensue i mean how often have we come out with a decision such is the you know the bankruptcy court decision congress adjusts and acts a statute that here is what did the congress than an act of this statute in two thousand and ten do that they really set up a system in which the states are subject to the kind of honor a situation that the petitioner claims and i think there are three textual indications of jeck give textual indications that that cannot possibly have been the statutory scheme that congress tried to set up first is the existence of the federal exchanges it would make no sense no sense for congress to have provided for federal exchanges if as as mr carden suggests the statutory design was supposed to result in every state establishing this exchange second well wouldn't of been again talking about think of federalism values are promoted by our interpretation because if if that is indeed what a state thought if a state really would have preferred that not to have the state government participate in the implementation of this act for reasons that your honor identified the structure of the act that congress and put in place and they were advocating for today fully vindicates that concern they can decide not to participate without having any adverse consequences visited upon the citizens of the state and that's why our reading is the pro federalism reading it's their reading that seems to me that is the anti federalism reading and that's a powerful reason to reject it and if i could go to the second statutory point which is related to what we're talking about justice kennedy which is section thirteen twenty one says that this statute is designed to afford state flexibility state flexibility it would be an orwellian sense of the word flexibility to use it in the manner that petitioners say the statute uses it because it's the polar opposite of flexibility in the third point it seems to me is the notice point that if indeed the plan was as mr carbon said that every state was going to establish an exchange for itself and that that would cure all of the massive statutory anomalies and textual anomalies in absurdities and impossibilities that his reading provides for if that was really the plan then  consequence for the states would be in neon lights in the statute you would want to make absolutely sure that every state got the message but instead what you have is a sub clause in there section thirty six b which is a provision that addresses the eligibility of individual taxpayers for the act this is not the most elegant only drafted statute was pushed through on expedited procedures and didn't have the kind of consideration by a conference committee for example if that statute usually do what would be so surprising if among its other imperfections there's the imperfection that what the states have to do is not is not obvious enough but it doesn't strike me as inconceivable so justice scalia i'm going to answer that question by talking about the legislative process because i think it is quite relevant i think it ought to be quite relevant even to you with respect to the question you just asked the language here in thirty six b was not the product of some last minute deal that wasn't the product of scrambling at the end the language that emerged here the statutory structure with the language of thirty six b about tax credits the languages and thirteen eleven languages and thirteen twenty one was the product of the senate finance committee markup which went on for weeks and weeks it was a public it was a public hearing it frankly it was covered by c span you can go watch it on the c span archives if you want to and you will see coming out of that that understanding a clear understanding was what this says a statutory set up would result in subsidies being available in every state there were senators were there not who were opposed to having the federal government run the whole thing because they thought that would lead to a single payer system which which some people wanted and the explanation for this provision is  know there's absolutely no contemporaneous evidence and none whatsoever that anybody thought that way that the solution to the problem iran has identified is what congress did but having states have the option to set up their own exchanges with state by state federal fallbacks rather than national system center nelson has made clear he has stated that he had no intention of a kind there's no contemporaneous evidence at all that anyone did and i do and what mr  this was the product of some deal to try to get votes so the actors get past what i would suggest to your honor is that there is objective proof that that is not true the provisions in the act that were negotiated at the end to secure the necessary votes are in title ten of the app and if you look in the in the act pages eight thirty three to nine twenty four that's title ten you can see all the amendments not a single one has anything to do with the statutory use that language why didn't they use other formulation so the pure elsewhere in the act why didn't they say as stablished under the act why didn't they say established within the state why didn't they include a provision saying that an exchange established by h h s is a state exchange when they have a provision in there that does exactly that for the district of columbia and for the territories it says that they are deemed to be states for purposes of the so  would they do that so of course the provision says it doesn't say established by the state with a period after state it says established by the state under section thirteen eleven and our position  think this is clearly the better reading of the text that by cross referencing section thirteen eleven affectively what congress is doing is saying that exchange is established through whatever thesis i think regular and i think it goes in the right direction if you're just ride with me for a little bit george is going to be hard to get on to that but your answer doesn't explain why by the state isn't there then why didn't they say established under thirteen eleven or so the second point is that wherever this provision appears in the act established by the state under section thirteen eleven it's doing work in the work it's doing is saying what we're talking about is the specific exchange established in the specific state as opposed to general rule exchanges if you look at the medicaid means of ever provision the chip and it works the same way why didn't you say in that state that's the phrase you just used in the state why didn't they say you know this is because suppose they could have but it worked perfectly well this way if you look at the qualified individual provision it's clearly how they're using it with respect to the qualified individual provision and with respect to that provision it says a qualified individual is a person who is located who resides in the state that established the exchange clearly what they're talking about is a geographical reference to the particular state that's what's going on there and it's going on every time the statute uses that phrase towards doing that work and that's why it's in there but now for i could go back to your point justice kennedy says established by state under section thirteen eleven section thirteen eleven b one says each state shall establish an american health benefits exchange for the state but it's not as mr carlin said in urging that states that what it says each state sh establish now we know that when congress use that language each state shall establish it must have meant something more inclusive than each state government shall itself that of the exchange we know that because congress  legislating against the backdrop of the tenth amendment and so it couldn't impose that requirement and we know that because of section thirteen twenty one because section thirteen twenty one provides the means by which the thirteen eleven b one requirement is satisfied to be satisfied by a state electing to meet the federal requirements for exchanges or it can be satisfied in the event that a state doesn't or tries it comes up short by h h s stepping in and establishing the so when the statute says each state shall establish it really means the federal government shall establish of the state doesn't establish i think the right would have a right one of the correct interpretation you would need thirteen twenty one of the law i don't know i think the right way to think about this justice alito is that what's going on here is that the right place to focus and we put that way the right place to focus here is not on the who but on the what on the thing that gets set up and whether it qualifies as an exchange  established by the state and these exchanges do qualify and the reason they qualify is because they fulfill the requirement in section thirteen eleven the one that each state shall establish in exchange and thirteen twenty one tells you that because it oneness when a state hasn't elected to meet the federal requirements h h s steps in and what h h s does is set up the required exchanges as such exchange which is referring to immediately prior to the required exchange with the only exchange required in the act is an exchange under section thirteen eleven b one so it has to be but that's that what h h s a doing of the plain text of the statute is fulfilling the requirement of section thirteen eleven b one that each state  an exchange and for that reason we say it qualifies as an exchange established by the state that's reinforces just as prior suggested earlier by that definition which says an exchange is an exchange established under such thirteen eleven thirteen eleven again thirteen eleven b one which says each state shall establish an exchange and it has to be that way because petitioners that can see it in it's a page twenty two of their brief then an exchange that h h s sets up is supposed to be the same exchange and then petition or say function just like an exchange that the state sets up for these or you're putting a lot of weight on the woodworks such such exchange so it seems to me the most unrealistic interpretation of such to mean the federal government chela stablish a state exchange rather it seems to me such means an exchange for the state rather than an exchange of the state how can we get federal government establish same as it is now and the statute said in thirteen twenty one that an exchange set up set up by h h s shall qualify as an exchange says that was by the state for purposes of section thirteen eleven you wouldn't change the language of thirty six b one iota and there wouldn't be any doubt in anyone's mind that the subsidies were bailable on federal exchanges and what we're saying is that effectively reading thirteen eleven and thirteen twenty one together that is what the statute does and that certainly that is a reasonable reading the statute it is really the only reading of the statute that allows you to be faithful to the text of thirteen eleven b one the word shall and to the tenth amendment in order for there the word such means qualifying as the states change or being equivalent to the state exchange for purposes of the operation the statute that is a reasonable reading of the particular textural provisions and once you've concluded that it's a reasonable reading that particular textural provisions then you have to read it the way that we say it's need is to be read because it is the only way to make sense of the statute as a whole is the only way to bring it into harmony with the acts qualified individual and qualified health plan provisions which do lead to what they admit is an absurdity i've pointed out some but i think they're wrong about each one i want to sign as much as i make one i'd be interested in your answer to forty two u s c section thirteen sic ninety six w dash three h one b which says that each state shall established procedures to ensure that an exchange of stablished by the state utilize a secure electronic interface and they say that if that is read to if exchange stablished by the state there is read to mean exchange that means that the state in which that exchange is established is responsible for making sure that the federal exchange has a secure electronic interface just wrong about that is just this is completely wrong the statute says that the state shall the first of all the statutory obligations addressed to the state medicaid and schip agencies what it says is they shall established procedures to insure the coordination h h s has issued regulations setting forth what that statutory provision requires of states in those circumstances every state where there's a federally facilitated exchange has met the requirements and fulfilled them and it works perfectly fine there's no nominee there at all of the state that meant to him it requires a regulation to say what do the regulations dispatch yes they do do they give the state authority to say whether or not these these conditions have been met they were the requirements or imposed on the state medicaid and chip end of the relationship that's what the statute does in the regulations implement that statutory requirement and it's satisfied in every state and of course as your honor reading it to me said it does say and i think that proves our point the statute says each state shall it doesn't say states with that have set up no anomalies right from the but i think as i understand your answer to be that there are federal regulations telling the states what they have to do here and they've all done it but the the fact remains that the state has some obligation under the regulations to make sure that there is a proper interface with the federal exchange on the state side of the interface yes but that's the chip and medicaid agencies those are state government agencies and it's their side of the interface of the statute governance and the in all as i said i don't think there are no are reading but if they are they pale in comparison to the nominees on the other side i mean i really do want to focus on this point about the qualified health plan and a qualified individual because the statute is quite clear in section thirteen eleven that an exchange not an exchange established by the state but an exchange can only sell a qualified health plan that is for big from selling a health plan that is not a qualified health plan and that's not an exchange established by state is in exchange now the statute also says that to certify a health plan is qualified the exchange has to decide that it is in the interest of qualified individuals apollo fine individuals or persons who reside in the state that established the exchange so if you read the statute the language the way mr carden reason instead of the way we read it you come to the conclusion and the state will federally facilitated exchange you are not qualified individuals therefore the exchange cannot certify a qualified health plan as being in the interest of qualified individuals because there aren't any so there aren't any qualified health plans that can lawfully be sold on the exchange what is the provision that says that only a quote that a only a qualified individual can be  enroll in the plan under an exchange so that the i will address that i just want to make could the provision i'm talking about with respect to the probation on selling a qualified health plan to anybody on the about anything other than qualified health in an exchange is thirteen eleven d to be which is a page a day of the pentagon our grief is absolutely on ambiguous and exchange on an exchange established by the state and exchange may not make available any health plan that is not qualified health plan so qualified health care but what's the provision you were referring to when you said that an exchange may enroll only a qualified vidual well i think what the what the statute says throughout is that the qualified individuals are eligible to purchase on exchanges and it's the necessary meaning of that phrase that if you are not a qualified individual then you are not eligible to purchase health care on an exchange because otherwise the word qualified would not have any meaning the whole meaning of the word qualified as distinguished between people who are eligible and people were ineligible as a policy matter wouldn't make any sense because think of the people who are not qualified individuals the people who live in the state the people in prison and their own lawfully documented you know it's part of section thirteen twelve a person qualified to purchase on an exchange most will reside in the state that established the exchange right and there are no such people in thirty four states on the list a carbon styria the statute so just doesn't just it's a new just one into a textual brick wall well i understand your argument is that it's it's a logical inference from a number of provisions that only reading the word qualified out of the statute if you read it that way and out of ideas used in the in the the lay sense of the term it's not a technical term here well i think well given the way is defined is defined as a person who resides in the state it excludes people out of state it does that because the statute was quite that you weren't going to be allowed to shop for insurance policies across state lines because that would infringe on traditional state products regulating insurance and and with respect to prisoners don't make any sense to say the prisoner should be able to get insurance mr carden says yes it does because they get out of prison well there's a specific statutory provision that says when you face a changed life circumstance such as getting out of prison you can sign up for insurance at that point he makes the point about unlawfully present persons being both unqualified and  being able to be covered but that's not so that's not surplus that's there for a very important reason which is that someone can be unlawful status and therefore be eligible for health care but then lose lawful status and at that point they can no longer be covered so let me just none of that works for them none of that works for them and but to really to get to the fundamental point here that both at the level of text you have clear irresolvable conflicts so the statute can't work if you read it mr carbons way you have ministers billions of dollars of subsidies involve your but two points about that and it seems to me are are cases say that if the internal revenue service is going to allow deductions use these that have to be very very clear so that it things middle that the director of internal revenue didn't didn't identify this problem if it's ambiguous and advise congress at once so a few points about that with respect to chevron difference first we do think chevron deference clearly supports the government here and i'll explain why but before you get to that you can resolve and should resolve this statute and statutes meaning in our favor even without resort to chevron deference that's what the canon of reading statute as a whole to make it work harmoniously direction to do so with a very important principles of federalism that we've been describing here director to do if you think there's a constitutional problem with the statute it's what the doctor constitutional avoidance direction to do now with respect to chevron section thirty six b g of the statute expressly delegates to the i r s the specific authority to make any decisions necessary to implement section thirty six b so you don't have any ambiguity congress said iris should do this is a big question but as the court said in city of arlington two terms ago chevron applies the big questions as well as and it's certainly not consistent with this court's unanimous decision in mayo two terms ago that chevron applies to the tax code like anything else if you like if you're right about chevron that would indicate that a subsequent administration could change that a very strong case under step two of the chevron analysis that that was a reasonable judgment in view of the disruptive consequences so i said i think you can resolve and should resolve  because the statute really has to be read when taken as a whole to adopt the government's position what i do take if there are any if there are any tax attorneys in the in the courtroom today i think probably they wrote down what you just said when we get future tax cases the united states is going to argue that we should not read them to you know we there should be no presumption a tax credit is provided by that statute or should i you should read it according to its terms and when you read this provision according to its terms and you read it in context and you read it against the background principles of federalism you have to affirm the government's interpretation thank you thank you general of four minutes mr carbon thank you mr chief justice very quickly on standing mr hurst would be subject to a penalty absent relief by this court for twenty fourteen as i've discussed both ian this is levy of course would face the same principle for twenty fifteen if the government's suggesting that their cases become moot because of changed circumstances under cardinal chemical five await us eight three it's of their burden to raise it not ours to supplement the record in terms of the anomaly in terms of all the states losing thirty four states losing their medicaid funds the solicitor general greatly distorted the statute it's printed sixty four a of their exhibit it says a state shall established procedures of the notion that h h s established them is obviously contrary to that it says the state will identify people to enroll on their exchanges well they can enroll anybody on very exchanges if there are no such exchanges in the state therefore by the plain language if you adopt the notion that exchange established by the state means established by all of them need to limited but so is in a limited way but so is the need to ensure that exemptions from tax liability are read in a limited way and under your reading we're giving more exemptions to employers not to provide insurance more exemptions to states and others or to individuals how how does that work i mean you've got requires an m ambiguous that it's not true for the tax credit in terms of the employer mandate i think that's very helpful in terms of justice kennedy's concern about federalism under their view of the statute the federal government gets to unilaterally impose on states there's an amicus from indiana describing this a requirement that states insure their own individuals it implies the employer mandate the state so they're under their theory the states are absolutely helpless to stop this federal intervention into their most basic personnel practices whereas under our theory they are able to say no so actually the more intrusive view of the statute is there in terms of the funding condition head on your honor i think my short answer is as follows there's no way to view this statute as more coercive or harmful than the medicaid version of medicaid that was approved by this court and if id and indeed the n f i b dissenting opinion point to this provision as something that was an acceptable non coercive alternative but in all of that's even if there's a constitutional doubt under a novel constitutional question as justice scalia pointed out there's no alternative reading of the statute that that avoids that because either way you're intruding on states in service of the nominee in terms of qualified individuals as predicted solicitor general did not come up here and tell you yes it's we prevail here under this theory they're going to have to empty out the h h s exchanges nor did he even respond to my argument that with respect to an exchange under the definitional section only applies to state exchanges so i think we can view this is as a complete tendentious litigation position and not a serious st terms of the qualified health plan that he discussed with you justice alito the complete answer to that is that is in thirteen eleven thirteen eleven only is talking about state established exchanges it has no application h s exchanges therefore it can't possibly create an anomaly with respect to those h h s exchanges thank you counsel cases submitted