Mike Konczal points out the fundamental problem with the Halbig proponent's position. They are arguing specifically that the statutory language isn't a typo at all, and that theirs is the intended interpretation of the statute. Halbig and its proponents claim that the authors of the ACA intended to apply subsidies only to state implemented exchanges in order to coerce states into implementing exchanges so that the federal government wouldn't have to. As Konczal says, the proponents claim that it wasn't an ambiguous typo, but a secret doomsday device. The problem with that, of course, is you can't threaten people into submission if they aren't aware of your doomsday device--if this was intended to be threatening, then where is the threat?
Michael F. Cannon has done his best to dig up actual evidence of the Halbig threat:I will add the same disclaimer as Cannon did: this is the only evidence, anywhere, ever, that has been offered as support for Halbig's claim. Cannon states the proponent's case:
"Baucus’s response is hardly a model of clarity. But I can see no possible interpretation other than Baucus is admitting that (A) the statute makes tax credits conditional on states establishing an Exchange, and therefore does not authorize tax credits through federal Exchanges, and (B) that this feature was essential for the Senate’s tax-writing committee to have jurisdiction to legislate in the area of health insurance."I want to point out that Cannon's point (B) doesn't really follow. This was an impromptu remark offering tax subsidies as one example of why the Senate Finance Committee has jurisdiction over the ACA. Indeed, the subsidies aren't even the only reason the Baucus offers--he starts by noting that the ACA is largely about medicaid regulations, which are indisputably exclusive jurisdiction of the committee. But this is a moot point--jurisdiction and parliamentary procedure are not disputed in the Halbig case.
As to point (A) I think you really have to twist the words to make them say that subsidies don't apply to federal exchanges. Here's the transcript of the video starting at 1:54 minutes in:
Ensign: "How do we have jurisdiction on changing state laws on coverage? [outside of Medicaid]"The last line reveals the full extent of Baucus's argument: "Senate Finance Committee because tax credits." Baucus was arguing that Senate Finance Committee can promulgate insurance regulations for plans offered on exchanges because plans on the exchanges are eligible for tax credits--at no point anywhere in the video is any contrast made between exchanges created by states versus HHS. In fact, adopting Cannon's interpretation that states can opt out of the tax subsidies actually contradicts Baucus's point because the bill does not allow states to opt out of the insurance regulations promulgated by the Senate Finance Committee (this is not disputed in Halbig). Had it been made clear, at any point during this hearing, that states opting not to set up their own exchange would be ineligible for tax subsidies, Senator Ensign would have attacked the validity of the committee's regulations on non-subsidized exchanges. He didn't do that, because it was clear to everyone in that room that non-cooperating states would still be eligible for tax subsidies. CASE CLOSED.
Baucus: "there are conditions to participate in the exchange"
Ensign: "that's right"
Baucus: "for setting up an exchange"
Ensign: "these would be conditions to participate"
Baucus: "and states, an exchange is essentially is tax credits"
Besides, I don't accept this kind of evidence as valid. It gives individual congressmen way too much power. If Baucus had casually said in committee that section 1312 should be interpreted as requiring everyone to make him a sandwich, would we all be legally required to give him a sandwich? It was his intention, and there's nothing in the legislative record that says otherwise!
[update: Here's an amicus brief, signed by Max Baucus, stating that
"Congress always intended that the tax credits be available to all Americans, regardless of whether they purchased their health insurance on a state-run or federally-facilitated Exchange."]