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															SUPREME COURT OF THE UNITED STATES

															_________________

															No. 14–114

															_________________

															DAVID KING, et al., PETITIONERS v. SYLVIA BURWELL, SECRETARY OF HEALTHAND HUMAN SERVICES,
et al.

															on writ of certiorari to the united states
court of appeals for the fourth circuit

															[June 25, 2015]

															Chief Justice Roberts delivered the opinion of
the Court.

															The Patient Protection and Affordable Care Act
adopts a series of interlocking reforms designed to expand coverage
in the individual health insurance market. First, the Act bars
insurers from taking a person’s health into account when deciding
whether to sell health insurance or how much to charge. Second, the
Act generally requires each person to maintain insurance coverage
or make a payment to the Internal Revenue Service. And third, the
Act gives tax credits to certain people to make insurance more
affordable.

															In addition to those reforms, the Act requires
the creation of an “Exchange” in each State—basically, a
marketplace that allows people to compare and purchase insurance
plans. The Act gives each State the opportunity to establish its
own Exchange, but provides that the Federal Government will
establish the Exchange if the State does not.

															This case is about whether the Act’s
interlocking reforms apply equally in each State no matter who
establishes the State’s Exchange. Specifically, the question
pre-sented is whether the Act’s tax credits are available in States
that have a Federal Exchange.

															I

															A

															The Patient Protection and Affordable Care
Act, 124Stat. 119, grew out of a long history of failed health
insurance reform. In the 1990s, several States began experimenting
with ways to expand people’s access to coverage. One common
approach was to impose a pair of insurance market regulations—a
“guaranteed issue” requirement, which barred insurers from denying
coverage to any person because of his health, and a “community
rating” requirement, which barred insurers from charging a person
higher premiums for the same reason. Together, those requirements
were designed to ensure that anyone who wanted to buy health
insurance could do so.

															The guaranteed issue and community rating
requirements achieved that goal, but they had an unintended
consequence: They encouraged people to wait until they got sick to
buy insurance. Why buy insurance coverage when you are healthy, if
you can buy the same coverage for the same price when you become
ill? This consequence—known as “adverse selection”—led to a second:
Insurers were forced to increase premiums to account for the fact
that, more and more, it was the sick rather than the healthy who
were buying insurance. And that consequence fed back into the
first: As the cost of insurance rose, even more people waited until
they became ill tobuy it.

															This led to an economic “death spiral.” As
premiums rose higher and higher, and the number of people buying
insurance sank lower and lower, insurers began to leave the market
entirely. As a result, the number of people without insurance
increased dramatically.

															This cycle happened repeatedly during the 1990s.
For example, in 1993, the State of Washington reformed its
individual insurance market by adopting the guaranteed issue and
community rating requirements. Over the next three years, premiums
rose by 78 percent and the number of people enrolled fell by 25
percent. By 1999, 17 of the State’s 19 private insurers had left
the market, and the remaining two had announced their intention to
do so. Brief for America’s Health Insurance Plans as Amicus
Curiae 10–11.

															For another example, also in 1993, New York
adopted the guaranteed issue and community rating requirements.
Over the next few years, some major insurers in the individual
market raised premiums by roughly 40 percent. By 1996, these
reforms had “effectively eliminated the commercial individual
indemnity market in New York with the largest individual health
insurer exiting the market.” L. Wachenheim & H. Leida, The
Impact of Guaranteed Issue and Community Rating Reforms on States’
Individual Insurance Markets 38 (2012).

															In 1996, Massachusetts adopted the guaranteed
issue and community rating requirements and experienced similar
results. But in 2006, Massachusetts added two more reforms: The
Commonwealth required individuals to buy insurance or pay a
penalty, and it gave tax credits to certain individuals to ensure
that they could afford the insurance they were required to buy.
Brief for Bipartisan Economic Scholars as Amici Curiae 24–25. The combination of these three reforms—insurance market
regulations, a coverage mandate, and tax credits—reduced the
uninsured rate in Massachusetts to 2.6 percent, by far the lowest
in the Nation. Hearing on Examining Individual State Experiences
with Health Care Reform Coverage Initiatives in the Context of
National Reform before the Senate Committee on Health, Education,
Labor, and Pensions, 111th Cong., 1st Sess., 9 (2009).

															B

															The Affordable Care Act adopts a version of
the three key reforms that made the Massachusetts system
successful. First, the Act adopts the guaranteed issue and
community rating requirements. The Act provides that “each health
insurance issuer that offers health insurance coverage in the
individual . . . market in a State must accept every
. . . individual in the State that applies for such
coverage.” 42 U. S. C. §300gg–1(a). The Act also bars
insurers from charging higher premiums on the basis of a person’s
health. §300gg.

															Second, the Act generally requires individuals
to maintain health insurance coverage or make a payment to the IRS.
26 U. S. C. §5000A. Congress recognized that, without an
incentive, “many individuals would wait to purchase health
insurance until they needed care.” 42 U. S. C.
§18091(2)(I). So Congress adopted a coverage requirement to
“minimize this adverse selection and broaden the health insurance
risk pool to include healthy individuals, which will lower health
insurance premiums.” Ibid. In Congress’s view, that coverage
requirement was “essential to creating effective health insurance
markets.” Ibid. Congress also provided an exemption from the
coverage requirement for anyone who has to spend more than eight
percent of his income on health insurance. 26 U. S. C.
§§5000A(e)(1)(A), (e)(1)(B)(ii).

															Third, the Act seeks to make insurance more
affordable by giving refundable tax credits to individuals with
household incomes between 100 percent and 400 percent of the
federal poverty line. §36B. Individuals who meet the Act’s
requirements may purchase insurance with the tax credits, which are
provided in advance directly to the individual’s insurer. 42
U. S. C. §§18081, 18082.

															These three reforms are closely intertwined. As
noted, Congress found that the guaranteed issue and community
rating requirements would not work without the coverage
requirement. §18091(2)(I). And the coverage requirement would not
work without the tax credits. The reason is that, without the tax
credits, the cost of buying insurance would exceed eight percent of
income for a large number of individuals, which would exempt them
from the coverage requirement. Given the relationship between these
three reforms, the Act provided that they should take effect on the
same day—January 1, 2014. See Affordable Care Act, §1253,
redesignated §1255, 124Stat. 162, 895; §§1401(e), 1501(d), id., at 220, 249.

															C

															In addition to those three reforms, the Act
requires the creation of an “Exchange” in each State where
peoplecan shop for insurance, usually online. 42 U. S. C.
§18031(b)(1). An Exchange may be created in one of two ways. First,
the Act provides that “[e]ach State shall . . . establish
an American Health Benefit Exchange . . . for the State.” Ibid. Second, if a State nonetheless chooses not to
establish its own Exchange, the Act provides that the Secretary of
Health and Human Services “shall . . . establish and
operate such Exchange within the State.” §18041(c)(1).

															The issue in this case is whether the Act’s tax
credits are available in States that have a Federal Exchange rather
than a State Exchange. 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].” 26
U. S. C. §§36B(b)–(c) (emphasis added).

															The IRS addressed the availability of tax
credits by promulgating a rule that made them available on both
State and Federal Exchanges. 77 Fed. Reg. 30378 (2012). As relevant
here, the IRS Rule provides that a taxpayer is eligible for a tax
credit if he enrolled in an insurance plan through “an Exchange,”
26 CFR §1.36B–2 (2013), which is defined as “an Exchange serving
the individual market . . . regardless of whether the
Exchange is established and operated by a State . . . or
by HHS,” 45 CFR §155.20 (2014). At this point, 16 States and the
District of Columbia have established their own Exchanges; the
other 34 States have elected to have HHS do so.

															D

															Petitioners are four individuals who live in
Virginia, which has a Federal Exchange. They do not wish to
purchase health insurance. In their view, Virginia’s Exchange does
not qualify as “an Exchange established by the State under [ 42
U. S. C. §18031],” so they should not receive any tax
credits. That would make the cost of buying insurance more than
eight percent of their income, which would exempt them from the
Act’s coverage requirement. 26 U. S. C. §5000A(e)(1).

															Under the IRS Rule, however, Virginia’s Exchange would qualify as “an Exchange established by the State under
[ 42 U. S. C. §18031],” so petitioners would receive tax
credits. That would make the cost of buying insurance less than eight percent of petitioners’ income, which would subject them
to the Act’s coverage requirement. The IRS Rule therefore requires
petitioners to either buy health insurance they do not want, or
make a payment to the IRS.

															Petitioners challenged the IRS Rule in Federal
District Court. The District Court dismissed the suit, holding that
the Act unambiguously made tax credits available to individuals
enrolled through a Federal Exchange. King v. Sebelius , 997 F. Supp. 2d 415 (ED Va. 2014). The Court
of Appeals for the Fourth Circuit affirmed. 759 F. 3d 358
(2014). The Fourth Circuit viewed the Act as “ambiguous and subject
to at least two different interpretations.” Id., at 372. The
court therefore deferred to the IRS’s interpretation under Chevron U. S. A. Inc. v. Natural Resources
Defense Council, Inc. , 467 U. S. 837 (1984) . 759
F. 3d, at 376.

															The same day that the Fourth Circuit issued its
decision, the Court of Appeals for the District of Columbia Circuit
vacated the IRS Rule in a different case, holding that the Act
“unambiguously restricts” the tax credits to State Exchanges. Halbig v. Burwell , 758 F. 3d 390, 394 (2014). We
granted certiorari in the present case. 574 U. S. ___
(2014).

															II

															The Affordable Care Act addresses tax credits
in what is now Section 36B of the Internal Revenue Code. That
section provides: “In the case of an applicable taxpayer, there
shall be allowed as a credit against the tax imposed by this
subtitle . . . an amount equal to the premium assistance
credit amount.” 26 U. S. C. §36B(a). Section 36B then
defines the term “premium assistance credit amount” as “the sum of
the premium assistance amounts determined under paragraph
(2) with respect to all coverage months of the taxpayer
occurring during the taxable year.” §36B(b)(1) (emphasis added).
Section 36B goes on to define the two italicized terms—“premium
assistance amount” and “coverage month”—in part by referring to an
insurance plan that is enrolled in through “an Exchange established
by the State under [ 42 U. S. C. §18031].” 26
U. S. C. §§36B(b)(2)(A), (c)(2)(A)(i).

															The parties dispute whether Section 36B
authorizes tax credits for individuals who enroll in an insurance
plan through a Federal Exchange. Petitioners argue that a Federal
Exchange is not “an Exchange established by the State under [ 42
U. S. C. §18031],” and that the IRS Rule therefore
contradicts Section 36B. Brief for Petitioners 18–20. The
Government responds that the IRS Rule is lawful because the phrase
“an Exchange established by the State under [ 42 U. S. C.
§18031]” should be read to include Federal Exchanges. Brief for
Respondents 20–25.

															When analyzing an agency’s interpretation of a
statute, we often apply the two-step framework announced in Chevron , 467 U. S. 837 . Under that framework, we ask
whether the statute is ambiguous and, if so, whether the agency’s
interpretation is reasonable. Id. , at 842–843. This approach
“is premised on the theory that a statute’s ambiguity constitutes
an implicit delegation from Congress to the agency to fill in the
statutory gaps.” FDA v. Brown & Williamson Tobacco
Corp. , 529 U. S. 120, 159 (2000) . “In extraordinary
cases, however, there may be reason to hesitate before concluding
that Congress has intended such an implicit delegation.” Ibid. This is one of those cases. The tax credits are
among the Act’s key reforms, involving billions of dollars in
spending each year and affecting the price of health insurance for
millions of people. Whether those credits are available on Federal
Exchanges is thus a question of deep “economic and political
significance” that is central to this statutory scheme; had
Congress wished to assign that question to an agency, it surely
would have done so expressly. Utility Air Regulatory Group v. EPA , 573 U. S. ___, ___ (2014) (slip op., at 19)
(quoting Brown & Williamson , 529 U. S., at 160). It
is especially unlikely that Congress would have delegated this
decision to the IRS , which has no expertise in crafting
health insurance policy of this sort. See Gonzales v. Oregon , 546 U. S. 243 –267 (2006). This is not a case
for the IRS.

															It is instead our task to determine the correct
reading of Section 36B. If the statutory language is plain, we must
enforce it according to its terms. Hardt v. Reliance
Standard Life Ins. Co. , 560 U. S. 242, 251 (2010) . But
oftentimes the “meaning—or ambiguity—of certain words or phrases
may only become evident when placed in context.” Brown &
Williamson , 529 U. S., at 132. So when deciding whether
the language is plain, we must read the words “in their context and
with a view to their place in the overall statutory scheme.” Id., at 133 (internal quotation marks omitted). Our duty,
after all, is “to construe statutes, not isolated provisions.” Graham County Soil and Water Conservation Dist. v. United
States ex rel. Wilson , 559 U. S. 280, 290 (2010) (internal
quotation marks omitted).

															A

															We begin with the text of Section 36B. As
relevant here, Section 36B allows an individual to receive tax
credits only if the individual enrolls in an insurance plan through
“an Exchange established by the State under [ 42 U. S. C.
§18031].” In other words, three things must be true: First, the
individual must enroll in an insurance plan through “an Exchange.”
Second, that Exchange must be “established by the State.” And
third, that Exchange must be established “under [ 42
U. S. C. §18031].” We address each requirement in
turn.

															First, all parties agree that a Federal Exchange
qualifies as “an Exchange” for purposes of Section 36B. See Brief
for Petitioners 22; Brief for Respondents 22. Section 18031
provides that “[e]ach State shall . . . establish an
American Health Benefit Exchange . . . for the State.”
§18031(b)(1). Although phrased as a requirement, the Act gives the
States “flexibility” by allowing them to “elect” whether they want
to establish an Exchange. §18041(b). If the State chooses not to do
so, Section 18041 provides that the Secretary “shall
. . . establish and operate such Exchange within
the State.” §18041(c)(1) (emphasis added).

															By using the phrase “such Exchange,” Section
18041 instructs the Secretary to establish and operate the same Exchange that the State was directed to establish under
Section 18031. See Black’s Law Dictionary 1661 (10th ed. 2014)
(defining “such” as “That or those; having just been mentioned”).
In other words, State Exchanges and Fed-eral Exchanges are
equivalent—they must meet the same requirements, perform the same
functions, and serve the same purposes. Although State and Federal
Exchanges are established by different sovereigns, Sections 18031
and 18041 do not suggest that they differ in any meaningful way. A
Federal Exchange therefore counts as “an Exchange” under Section
36B.

															Second, we must determine whether a Federal
Exchange is “established by the State” for purposes of Section 36B.
At the outset, it might seem that a Federal Exchange cannot fulfill
this requirement. After all, the Act defines “State” to mean “each
of the 50 States and the District of Columbia”—a definition that
does not include the Federal Government. 42 U. S. C.
§18024(d). But when read in context, “with a view to [its] place in
the overall statutory scheme,” the meaning of the phrase
“established by the State” is not so clear. Brown
&Williamson , 529 U. S., at 133 (internal quotation
marks omitted).

															After telling each State to establish an
Exchange, Section 18031 provides that all Exchanges “shall make
available qualified health plans to qualified individuals.” 42
U. S. C. §18031(d)(2)(A). Section 18032 then defines the
term “qualified individual” in part as an individual who “resides
in the State that established the Exchange.” §18032(f)(1)(A). And
that’s a problem: If we give the phrase “the State that established
the Exchange” its most natural meaning, there would be no “qualified individuals” on Federal Exchanges. But the Act clearly
contemplates that there will be qualified individuals on every Exchange. As we just mentioned, the Act requires all
Exchanges to “make available qualified health plans to qualified
individuals”—something an Exchange could not do if there were no
such individuals. §18031(d)(2)(A). And the Act tells the Exchange,
in deciding which health plans to offer, to consider “the interests
of qualified individuals . . . in the State or States in
which such Exchange operates”—again, something the Exchange could
not do if qualified individ-uals did not exist. §18031(e)(1)(B).
This problem arises repeatedly throughout the Act. See, e.g. , §18031(b)(2) (allowing a State to create “one Exchange
. . . for providing . . . services to both
qualified individuals and qualified small employers,” rather than
creating separate Exchanges for those two groups).[ 1 ]

															These provisions suggest that the Act may not
always use the phrase “established by the State” in its most
natural sense. Thus, the meaning of that phrase may not be as clear
as it appears when read out of context.

															Third, we must determine whether a Federal
Exchange is established “under [ 42 U. S. C. §18031].”
This too might seem a requirement that a Federal Exchange cannot
fulfill, because it is Section 18041 that tells the Secretary when
to “establish and operate such Exchange.” But here again, the way
different provisions in the statute interact suggests
otherwise.

															The Act defines the term “Exchange” to mean “an
American Health Benefit Exchange established under section 18031.”
§300gg–91(d)(21). If we import that definition into Section 18041,
the Act tells the Secretary to “establish and operate such
‘American Health Benefit Exchange established under section
18031.’ ” That suggests that Section 18041 authorizes the
Secretary to establish an Exchange under Section 18031, not (or not
only) under Section 18041. Otherwise, the Federal Exchange, by
definition, would not be an “Exchange” at all. See Halbig ,
758 F. 3d, at 399–400 (acknowledging that the Secretary
establishes Federal Exchanges under Section 18031).

															This interpretation of “under [ 42
U. S. C. §18031]” fits best with the statutory context.
All of the requirements that an Exchange must meet are in Section
18031, so it is sensible to regard all Exchanges as established
under that provision. In addition, every time the Act uses the word
“Exchange,” the definitional provision requires that we substitute
the phrase “Exchange established under section 18031.” If Federal
Exchanges were not established under Section 18031, therefore,
literally none of the Act’s requirements would apply to them.
Finally, the Act repeatedly uses the phrase “established under [ 42
U. S. C. §18031]” in situations where it would make no
sense to distinguish between State and Federal Exchanges. See, e.g. , 26 U. S. C. §125(f)(3)(A) (2012 ed., Supp.
I) (“The term ‘qualified benefit’ shall not include any qualified
health plan . . . offered through an Exchange established
under [ 42 U. S. C. §18031]”); 26 U. S. C.
§6055(b)(1)(B)(iii)(I) (2012 ed.) (requiring insurers to report
whether each insurance plan they provided “is a qualified health
plan offered through an Exchange established under [ 42
U. S. C. §18031]”). A Federal Exchange may therefore be
considered one established “under [ 42 U. S. C.
§18031].”

															The upshot of all this is that the phrase “an
Exchange established by the State under [ 42 U. S. C.
§18031]” is properly viewed as ambiguous. The phrase may be limited
in its reach to State Exchanges. But it is also possible that the
phrase refers to all Exchanges—both State and Federal—at
least for purposes of the tax credits. If a State chooses not to
follow the directive in Section 18031 that it establish an
Exchange, the Act tells the Secretary to establish “such Exchange.”
§18041. And by using the words “such Exchange,” the Act indicates
that State and Federal Exchanges should be the same. But State and
Federal Exchanges would differ in a fundamental way if tax credits
were available only on State Exchanges—one type of Exchange would
help make insurance more affordable by providing billions of
dollars to the States’ citizens; the other type of Exchange would
not.[ 2 ]

															The conclusion that Section 36B is ambiguous is
further supported by several provisions that assume tax credits
will be available on both State and Federal Exchanges. For example,
the Act requires all Exchanges to create outreach programs that
must “distribute fair and impartial information concerning
. . . the availability of premium tax credits under
section 36B.” §18031(i)(3)(B). The Act also requires all Exchanges
to “establish and make avail-able by electronic means a calculator
to determine the actual cost of coverage after the application of
any pre-mium tax credit under section 36B.” §18031(d)(4)(G). And
the Act requires all Exchanges to report to the Treasury Secretary
information about each health plan they sell, including the
“aggregate amount of any advance payment of such credit,” “[a]ny
information . . . necessary to determine eligibility for,
and the amount of, such credit,” and any “[i]nformation necessary
to determine whether a taxpayer has received excess advance
payments.” 26 U. S. C. §36B(f)(3). If tax credits were
not available on Federal Exchanges, these provisions would make
little sense.

															Petitioners and the dissent respond that the
words “established by the State” would be unnecessary if Congress
meant to extend tax credits to both State and Fed-eral Exchanges.
Brief for Petitioners 20; post , at 4–5. But “our preference
for avoiding surplusage constructions is not absolute.” Lamie v. United States Trustee , 540 U. S. 526,
536 (2004) ; see also Marx v. General Revenue Corp. ,
568 U. S. ___, ___ (2013) (slip op., at 13) (“The canon
against surplusage is not an absolute rule”). And specifically with
respect to this Act, rigorous application of the canon does not
seem a particularly useful guide to a fair construction of the
statute.

															The Affordable Care Act contains more than a few
examples of inartful drafting. (To cite just one, the Act creates
three separate Section 1563s. See 124Stat. 270, 911, 912.) Several
features of the Act’s passage contributed to that unfortunate
reality. Congress wrote key partsof the Act behind closed doors,
rather than through “the traditional legislative process.” Cannan,
A Legislative History of the Affordable Care Act: How Legislative
Procedure Shapes Legislative History, 105 L. Lib. J. 131, 163
(2013). And Congress passed much of the Act using a complicated
budgetary procedure known as “reconciliation,” which limited
opportunities for debate and amendment, and bypassed the Senate’s
normal 60-vote filibuster requirement. Id., at 159–167. As a
result, the Act does not reflect the type of care and deliberation
that one might expect of such significant legislation. Cf.
Frankfurter, Some Reflections on the Reading of Statutes, 47 Colum.
L. Rev. 527, 545 (1947) (describing a cartoon “in which a senator
tells his colleagues ‘I admit this new bill is too complicated to
understand. We’ll just have to pass it to find out what it
means.’ ”).

															Anyway, we “must do our best, bearing in mind
the fundamental canon of statutory construction that the words of a
statute must be read in their context and with a view to their
place in the overall statutory scheme.” Util-ity Air Regulatory
Group , 573 U. S., at ___ (slip op., at 15) (internal
quotation marks omitted). After reading Section 36B along with
other related provisions in the Act, we cannot conclude that the
phrase “an Exchange established by the State under [Section 18031]”
is unambiguous.

															B

															Given that the text is ambiguous, we must turn
to the broader structure of the Act to determine the meaning of
Section 36B. “A provision that may seem ambiguous in isolation is
often clarified by the remainder of the statu-tory scheme
. . . because only one of the permissible meanings
produces a substantive effect that is compatible with the rest of
the law.” United Sav. Assn. of Tex. v. Timbers of Inwood
Forest Associates, Ltd. , 484 U. S. 365, 371 (1988) . Here,
the statutory scheme compels us to reject petitioners’
interpretation because it would destabilize the individual
insurance market in any State with a Federal Exchange, and likely
create the very “death spirals” that Congress designed the Act to
avoid. See New York State Dept. of Social Servs. v. Dublino , 413 U. S. 405 –420 (1973) (“We cannot
interpret federal statutes to negate their own stated
purposes.”).[ 3 ]

															As discussed above, Congress based the
Affordable Care Act on three major reforms: first, the guaranteed
issue and community rating requirements; second, a requirement that
individuals maintain health insurance coverage or make a payment to
the IRS; and third, the tax credits for individuals with household
incomes between 100 percent and 400 percent of the federal poverty
line. In a State that establishes its own Exchange, these three
reforms work together to expand insurance coverage. The guaranteed
issue and community rating requirements ensure that anyone can buy
insurance; the coverage requirement creates an incentive for people
to do so before they get sick; and the tax credits—it is hoped—make
insurance more affordable. Together, those reforms “minimize
. . . adverse selection and broaden the health in-surance
risk pool to include healthy individuals, which will lower health
insurance premiums.” 42 U. S. C. §18091(2)(I).

															Under petitioners’ reading, however, the Act
would operate quite differently in a State with a Federal Exchange.
As they see it, one of the Act’s three major reforms—the tax
credits—would not apply. And a second major reform—the coverage
requirement—would not apply in a meaningful way. As explained
earlier, the coverage requirement applies only when the cost of
buying health insurance (minus the amount of the tax credits) is
less than eight percent of an individual’s income. 26
U. S. C. §§5000A(e)(1)(A), (e)(1)(B)(ii). So without the
tax credits, the coverage requirement would apply to fewer
individuals. And it would be a lot fewer. In 2014,
approximately 87 percent of people who bought insurance on a
Federal Exchange did so with tax credits, and virtually all of
those people would become exempt. HHS, A. Burke, A. Misra, & S.
Sheingold, Premium Affordability, Competition, and Choice in the
Health Insurance Marketplace 5 (2014); Brief for Bipartisan
Economic Scholars as Amici Curiae 19–20. If petitioners are
right, therefore, only one of the Act’s three major reforms would
apply in States with a Federal Exchange.

															The combination of no tax credits and an
ineffective coverage requirement could well push a State’s
individual insurance market into a death spiral. One study predicts
that premiums would increase by 47 percent and enrollment would
decrease by 70 percent. E. Saltzman & C. Eibner, The Effect of
Eliminating the Affordable Care Act’s Tax Credits in Federally
Facilitated Marketplaces (2015). Another study predicts that
premiums would increase by 35 percent and enrollment would decrease
by 69 percent. L. Blumberg, M. Buettgens, & J. Holahan, The
Implications of a Supreme Court Finding for the Plaintiff in King
vs. Burwell: 8.2 Million More Uninsured and 35% Higher Premiums
(2015). And those effects would not be limited to individuals who
purchase insurance on the Exchanges. Because the Act requires
insurers to treat the entire individual market as a single risk
pool, 42 U. S. C. §18032(c)(1), premiums outside the
Exchange would rise along with those inside the Exchange. Brief for
Bipartisan Economic Scholars as Amici Curiae 11–12.

															It is implausible that Congress meant the Act to
operate in this manner. See National Federation of Independent
Business v. Sebelius , 567 U. S. ___, ___ (2012)
(Scalia, Kennedy, Thomas, and Alito, JJ., dissenting) (slip op., at
60) (“Without the federal subsidies . . . the exchanges
would not operate as Congress intended and may not operate at
all.”). Congress made the guaranteed issue and community rating
requirements applicable in every State in the Nation. But those
requirements only work when combined with the coverage requirement
and the tax credits. So it stands to reason that Congress meant for
those provisions to apply in every State as well.[ 4 ]

															Petitioners respond that Congress was not
worried about the effects of withholding tax credits from States
with Federal Exchanges because “Congress evidently believed it was
offering states a deal they would not refuse.” Brief for
Petitioners 36. Congress may have been wrong about the States’
willingness to establish their own Exchanges, petitioners continue,
but that does not allow this Court to rewrite the Act to fix that
problem. That is particularly true, petitioners conclude, because
the States likely would have created their own Exchanges in
the absence of the IRS Rule, which eliminated any incentive that
the States had to do so. Id., at 36–38.

															Section 18041 refutes the argument that Congress
believed it was offering the States a deal they would not refuse.
That section provides that, if a State elects not to establish an
Exchange, the Secretary “shall . . . establish and
operate such Exchange within the State.” 42 U. S. C.
§18041(c)(1)(A). The whole point of that provision is to create a
federal fallback in case a State chooses not to establish its own
Exchange. Contrary to petitioners’ argument, Congress did not
believe it was offering States a deal they would not refuse—it
expressly addressed what would happen if a State did refuse
the deal.

															C

															Finally, the structure of Section 36B itself
suggests that tax credits are not limited to State Exchanges.
Section 36B(a) initially provides that tax credits “shall be
allowed” for any “applicable taxpayer.” Section 36B(c)(1) then
defines an “applicable taxpayer” as someone who (among other
things) has a household income between 100 percent and 400 percent
of the federal poverty line. Together, these two provisions appear
to make anyone in the specified income range eligible to receive a
tax credit.

															According to petitioners, however, those
provisions are an empty promise in States with a Federal Exchange.
In their view, an applicable taxpayer in such a State would be eligible for a tax credit—but the amount of that tax
credit would always be zero. And that is because—diving several
layers down into the Tax Code—Section 36B says that the amount of
the tax credits shall be “an amount equal to the premium assistance
credit amount,” §36B(a); and then says that the term “premium
assistance credit amount” means “the sum of the premium assistance
amounts determined under paragraph (2) with respect to all coverage
months of the taxpayer occurring during the taxable year,”
§36B(b)(1); and then says that the term “premium assistance amount”
is tied to the amount of the monthly premium for insurance
purchased on “an Exchange established by the State under [42
U. S. C. §18031],” §36B(b)(2); and then says that the
term “coverage month” means any month in which the taxpayer has
insurance through “an Exchange established by the State under [ 42
U. S. C. §18031],” §36B(c)(2)(A)(i).

															We have held that Congress “does not alter the
fundamental details of a regulatory scheme in vague terms or
ancillary provisions.” Whitman v. American Trucking
Assns., Inc. , 531 U. S. 457, 468 (2001) . But in
petitioners’ view, Congress made the viability of the entire
Affordable Care Act turn on the ultimate ancillary provision: a
sub-sub-sub section of the Tax Code. We doubt that is what Congress
meant to do. Had Congress meant to limit tax credits to State
Exchanges, it likely would have done so in the definition of
“applicable taxpayer” or in some other prominent manner. It would
not have used such a winding path of connect-the-dots provisions
about the amount of the credit.[ 5 ]

															D

															Petitioners’ arguments about the plain meaning
of Section 36B are strong. But while the meaning of the phrase “an
Exchange established by the State under [ 42 U. S. C.
§18031]” may seem plain “when viewed in isolation,” such a reading
turns out to be “untenable in light of [the statute] as a whole.” Department of Revenue of Ore. v. ACF Industries,
Inc. , 510 U. S. 332, 343 (1994) . In this instance, the
context and structure of the Act compel us to depart from what
would otherwise be the most natural reading of the pertinent
statutory phrase.

															Reliance on context and structure in statutory
interpretation is a “subtle business, calling for great wariness
lest what professes to be mere rendering becomes creation and
attempted interpretation of legislation becomes legislation
itself.” Palmer v. Massachusetts , 308 U. S. 79,
83 (1939) . For the reasons we have given, however, such reliance
is appropriate in this case, and leads us to conclude that Section
36B allows tax credits for insurance purchased on any Exchange
created under the Act. Those credits are necessary for the Federal
Exchanges to function like their State Exchange counterparts, and
to avoid the type of calamitous result that Congress plainly meant
to avoid.

															*  *  *

															In a democracy, the power to make the law
rests with those chosen by the people. Our role is more
confined—“to say what the law is.” Marbury v. Madison , 1 Cranch 137, 177 (1803). That is easier in some
cases than in others. But in every case we must respect the role of
the Legislature, and take care not to undo what it has done. A fair
reading of legislation demands a fair understanding of the
legislative plan.

															Congress passed the Affordable Care Act to
improve health insurance markets, not to destroy them. If at all
possible, we must interpret the Act in a way that is consistent
with the former, and avoids the latter. Section 36B can fairly be
read consistent with what we see as Congress’s plan, and that is
the reading we adopt.

															The judgment of the United States Court of
Appeals for the Fourth Circuit is

															Affirmed. Notes 1 The dissent argues that
one would “naturally read instructions about qualified individuals
to be inapplicable to the extent a particular Exchange has no such
individuals.” Post , at 10–11 (Scalia, J., dissenting). But
the fact that the dissent’s interpretation would make so many parts
of the Act “inapplicable” to Federal Exchanges is precisely what
creates the problem. It would be odd indeed for Congress to write
such detailed instructions about customers on a State Exchange,
while having nothing to say about those on a Federal
Exchange. 2 The dissent argues that
the phrase “such Exchange” does not suggest that State and Federal
Exchanges “are in all respects equivalent.” Post , at 8. In
support, it quotes the Constitution’s Elections Clause, which makes
the state legislature primarily responsible for prescribing
election regulations, but allows Congress to “make or alter such
Regulations.” Art. I, §4, cl. 1. No one would say that state
and federal election regulations are in all respects equivalent,
the dissent contends, so we should not say that State and Federal
Exchanges are. But the Elections Clause does not precisely define
what an election regulation must look like, so Congress can
prescribe regulations that differ from what the State would
prescribe. The Affordable Care Act does precisely define
what an Exchange must look like, however, so a Federal Exchange
cannot differ from a State Exchange. 3 The dissent notes that
several other provisions in the Act use the phrase “established by
the State,” and argues that our holding applies to each of those
provisions. Post , at 5–6. But “the presumption of consistent
usage readily yields to context,” and a statutory term may mean
different things in different places. Utility Air Regulatory
Group v. EPA , 573 U. S. ___, ___ (2014) (slip op.,
at 15) (internal quotation marks omitted). That is particularly
true when, as here, “the Act is far from a chef d’oeuvre of
legislative draftsmanship.” Ibid. Because the other
provisions cited by the dissent are not at issue here, we do not
address them. 4 The dissent argues that
our analysis “show[s] only that the statu-tory scheme contains a
flaw,” one “that appeared as well in other parts of the Act.” Post , at 14. For support, the dissent notes that the
guaranteed issue and community rating requirements might apply in
the federal territories, even though the coverage requirement does
not. Id., at 14–15. The confusion arises from the fact that
the guaranteed issue and community rating requirements were added
as amendments to the Public Health Service Act, which contains a
definition of the word “State” that includes the territories, 42
U. S. C. §201(f), while the later-enacted Affordable Care
Act contains a definition of the word “State” that excludes the
territories, §18024(d). The predicate for the dissent’s point is
therefore uncertain at best. 5 The dissent cites several
provisions that “make[ ] taxpayers of all States eligible for
a credit, only to provide later that the amount of the credit may
be zero.” Post , at 11 (citing 26 U. S. C. §§24, 32, 35,
36). None of those provisions, however, is crucial to the viability
of a comprehensive program like the Affordable Care Act. No one
suggests, for example, that the first-time-homebuyer tax credit,
§36, is essential to the viability of federal housing
regulation. SUPREME COURT OF THE UNITED STATES

															_________________

															No. 14–114

															_________________

															DAVID KING, et al., PETITIONERS v. SYLVIA BURWELL, SECRETARY OF HEALTHAND HUMAN SERVICES,
et al.

															on writ of certiorari to the united states
court of appeals for the fourth circuit

															[June 25, 2015]

															Justice Scalia, with whom Justice Thomas and
Justice Alito join, dissenting.

															The Court holds that when the Patient Protection
and Affordable Care Act says “Exchange established by the State” it
means “Exchange established by the State or the Federal
Government.” That is of course quite absurd, and the Court’s 21
pages of explanation make it no less so.

															I

															The Patient Protection and Affordable Care Act
makes major reforms to the American health-insurance market. It
provides, among other things, that every State “shall
. . . establish an American Health Benefit Exchange”—a
marketplace where people can shop for health-insurance plans. 42
U. S. C. §18031(b)(1). And it provides that if a State
does not comply with this instruction, the Secretary of Health and
Human Services must “establish and operate such Exchange within the
State.” §18041(c)(1).

															A separate part of the Act—housed in §36B of the
Internal Revenue Code—grants “premium tax credits” to subsidize
certain purchases of health insurance made on Exchanges. The tax
credit consists of “premium assistance amounts” for “coverage
months.” 26 U. S. C. §36B(b)(1). An individual has a
coverage month only when he is covered by an insurance plan “that
was enrolled in through an Exchange established by the State under
[§18031].” §36B(c)(2)(A). And the law ties the size of the premium
assistance amount to the premiums for health plans which cover the
individual “and which were enrolled in through an Exchange
established by the State under [§18031].” §36B(b)(2)(A). The
premium assistance amount further depends on the cost of certain
other insurance plans “offered through the same Exchange.”
§36B(b)(3)(B)(i).

															This case requires us to decide whether someone
who buys insurance on an Exchange established by the Secretary gets
tax credits. You would think the answer would be obvious—so obvious
there would hardly be a need for the Supreme Court to hear a case
about it. In order to receive any money under §36B, an individual
must enroll in an insurance plan through an “Exchange established
by the State.” The Secretary of Health and Human Services is not a
State. So an Exchange established by the Secretary is not an
Exchange established by the State—which means people who buy health
insurance through such an Exchange get no money under §36B.

															Words no longer have meaning if an Exchange that
is not established by a State is “established by the State.”
It is hard to come up with a clearer way to limit tax credits to
state Exchanges than to use the words “established by the State.”
And it is hard to come up with a reason to include the words “by
the State” other than the purpose of limiting credits to state
Exchanges. “[T]he plain, obvious, and rational meaning of a statute
is always to be preferred to any curious, narrow, hidden sense that
nothing but the exigency of a hard case and the ingenuity and study
of an acute and powerful intellect would discover.” Lynch v. Alworth-Stephens Co., 267 U. S. 364, 370 (1925)
(internal quotation marks omitted). Under all the usual rules of
interpretation, in short, the Government should lose this case. But
normal rules of interpretation seem always to yield to the
overriding principle of the present Court: The Affordable Care Act
must be saved.

															II

															The Court interprets §36B to award tax credits
on both federal and state Exchanges. It accepts that the “most
natural sense” of the phrase “Exchange established by the State” is
an Exchange established by a State. Ante, at 11.
(Understatement, thy name is an opinion on the Afford-able Care
Act!) Yet the opinion continues, with no semblance of shame, that
“it is also possible that the phrase refers to all Exchanges—both State and Federal.” Ante, at 13. (Impossible
possibility, thy name is an opinion on the Affordable Care Act!)
The Court claims that “the context and structure of the Act compel
[it] to depart from what would otherwise be the most natural
reading of the pertinent statutory phrase.” Ante, at 21.

															I wholeheartedly agree with the Court that sound
interpretation requires paying attention to the whole law, not
homing in on isolated words or even isolated sections. Context
always matters. Let us not forget, however, why context
matters: It is a tool for understanding the terms of the law, not
an excuse for rewriting them.

															Any effort to understand rather than to rewrite
a law must accept and apply the presumption that lawmakers use
words in “their natural and ordinary signification.” Pensacola
Telegraph Co. v. Western Union Telegraph Co. , 96
U. S. 1, 12 (1878) . Ordinary connotation does not always
prevail, but the more unnatural the proposed interpretation of a
law, the more compelling the contex-tual evidence must be to show
that it is correct. Today’s interpretation is not merely unnatural;
it is unheard of. Who would ever have dreamt that “Exchange
established by the State” means “Exchange established by the State or the Federal Government ”? Little short of an express
statutory definition could justify adopting this singular reading.
Yet the only pertinent definition here provides that “State” means
“each of the 50 States and the District of Columbia.” 42
U. S. C. §18024(d). Because the Secretary is neither one
of the 50 States nor the District of Columbia, that definition
positively contradicts the eccentric theory that an Exchange
established by the Secretary has been established by the State.

															Far from offering the overwhelming evidence of
meaning needed to justify the Court’s interpretation, other
contextual clues undermine it at every turn. To begin with, other
parts of the Act sharply distinguish between the establishment of
an Exchange by a State and the establishment of an Exchange by the
Federal Government. The States’ authority to set up Exchanges comes
from one provision, §18031(b); the Secretary’s authority comes from
an entirely different provision, §18041(c). Funding for States to
establish Exchanges comes from one part of the law, §18031(a);
funding for the Secretary to establish Exchanges comes from an
entirely different part of the law, §18121. States generally run
state-created Ex-changes; the Secretary generally runs federally
created Exchanges. §18041(b)–(c). And the Secretary’s authority to
set up an Exchange in a State depends upon the State’s
“ [f]ailure to establish [an] Exchange.” §18041(c) (emphasis
added). Provisions such as these destroy any pretense that a
federal Exchange is in some sense also established by a State.

															Reading the rest of the Act also confirms that,
as relevant here, there are only two ways to set up an
Exchange in a State: establishment by a State and establishment by
the Secretary. §§18031(b), 18041(c). So saying that an Exchange
established by the Federal Government is “established by the State”
goes beyond giving words bizarre meanings; it leaves the limiting
phrase “by the State” with no operative effect at all. That is a
stark violation of the elementary principle that requires an
interpreter “to give effect, if possible, to every clause and word
of a statute.” Montclair v. Ramsdell , 107 U. S.
147, 152 (1883) . In weighing this argument, it is well to remember
the difference between giving a term a meaning that duplicates
another part of the law, and giving a term no meaning at all.
Lawmakers sometimes repeat themselves—whether out of a desire to
add emphasis, a sense of belt-and-suspenders caution, or a lawyerly
penchant for doublets (aid and abet, cease and desist, null and
void). Lawmakers do not, however, tend to use terms that “have no
operation at all.” Marbury v. Madison , 1 Cranch 137,
174 (1803). So while the rule against treating a term as a
redundancy is far from categorical, the rule against treating it as
a nullity is as close to absolute as interpretive principles get.
The Court’s reading does not merely give “by the State” a
duplicative effect; it causes the phrase to have no effect
whatever.

															Making matters worse, the reader of the whole
Act will come across a number of provisions beyond §36B that refer
to the establishment of Exchanges by States. Adopting the Court’s
interpretation means nullifying the term “by the State” not just
once, but again and again throughout the Act. Consider for the
moment only those parts of the Act that mention an “Exchange
established by the State” in connection with tax credits:

															The formula for calculating the amount of
the tax credit, as already explained, twice mentions “an Exchange
established by the State.” 26 U. S. C. §36B(b)(2)(A),
(c)(2)(A)(i).

															The Act directs States to screen children
for eligibility for “[tax credits] under section 36B” and for
“anyother assistance or subsidies available for coverage obtained
through” an “Exchange established by the State.” 42
U. S. C. §1396w–3(b)(1)(B)–(C).

															The Act requires “an Exchange established
by the State” to use a “secure electronic interface” to determine
eligibility for (among other things) tax credits.
§1396w–3(b)(1)(D).

															The Act authorizes “an Exchange
established by the State” to make arrangements under which other
state agencies “determine whether a State resident is eligible for
[tax credits] under section 36B.” §1396w–3(b)(2).

															The Act directs States to operate Web
sites that allow anyone “who is eligible to receive [tax credits]
under section 36B” to compare insurance plans offered through “an
Exchange established by the State.” §1396w–3(b)(4).

															One of the Act’s provisions addresses the
enrollment of certain children in health plans “offered through an
Exchange established by the State” and then dis-cusses the
eligibility of these children for tax credits.
§1397ee(d)(3)(B).

															It is bad enough for a court to cross out “by
the State” once. But seven times?

															Congress did not, by the way, repeat “Exchange
established by the State under [§18031]” by rote throughout the
Act. Quite the contrary, clause after clause of the law uses a more
general term such as “Exchange” or “Exchange established under
[§18031].” See, e.g., 42 U. S. C. §§18031(k),
18033; 26 U. S. C. §6055. It is common sense that any
speaker who says “Exchange” some of the time, but “Exchange
established by the State” the rest of the time, probably means
something by the contrast.

															Equating establishment “by the State” with
establishment by the Federal Government makes nonsense of other
parts of the Act. The Act requires States to ensure (on pain of
losing Medicaid funding) that any “Exchange established by the
State” uses a “secure electronic interface” to determine an
individual’s eligibility for various benefits (including tax
credits). 42 U. S. C. §1396w–3(b)(1)(D). How could a
State control the type of electronic interface used by a federal
Exchange? The Act allows a State to control contracting decisions
made by “an Exchange established by the State.” §18031(f )(3).
Why would a State get to control the contracting decisions of a
federal Exchange? The Act also provides “Assistance to States to
establish American Health Benefit Exchanges” and directs the
Secretary to renew this funding “if the State . . . is
making progress . . . toward . . . establishing
an Exchange.” §18031(a). Does a State that refuses to set up an
Exchange still receive this funding, on the premise that Exchanges
established by the Federal Government are really established by
States? It is presumably in order to avoid these questions that the
Court concludes that federal Exchanges count as state Exchanges
only “for purposes of the tax credits.” Ante, at 13.
(Contrivance, thy name is an opinion on the Affordable Care
Act!)

															It is probably piling on to add that the
Congress that wrote the Affordable Care Act knew how to equate two
different types of Exchanges when it wanted to do so. The Act
includes a clause providing that “[a] territory that
. . . establishes . . . an Exchange
. . . shall be treated as a State” for certain purposes.
§18043(a) (emphasis added). Tellingly, it does not include a
comparable clause providing that the Secretary shall be
treated as a State for purposes of §36B when she establishes
an Exchange.

															Faced with overwhelming confirmation that
“Exchange established by the State” means what it looks like it
means, the Court comes up with argument after feeble argument to
support its contrary interpretation. None of its tries comes close
to establishing the implausible conclusion that Congress used “by
the State” to mean “by the State or not by the State.”

															The Court emphasizes that if a State does not
set up an Exchange, the Secretary must establish “such Exchange.”
§18041(c). It claims that the word “such” implies that federal and
state Exchanges are “the same.” Ante, at 13. To see the
error in this reasoning, one need only consider a parallel
provision from our Constitution: “The Times, Places and Manner of
holding Elections for Senators and Representatives, shall be
prescribed in each State by the Legislature thereof; but the
Congress may at any time by Law make or alter such
Regulations .” Art. I, §4, cl. 1 (emphasis added).
Just as the Affordable Care Act directs States to establish
Exchanges while allowing the Secretary to establish “such Exchange”
as a fallback, the Elections Clause directs state legislatures to
prescribe election regulations while allowing Congress to make
“such Regulations” as a fallback. Would anybody refer to an
election regulation made by Congress as a “regulation prescribed by
the state legislature”? Would anybody say that a federal election
law and a state election law are in all respects equivalent? Of
course not. The word “such” does not help the Court one whit. The
Court’s argument also overlooks the rudimentary principle that a
specific provision governs a general one. Even if it were true that
the term “such Exchange” in §18041(c) implies that federal and
state Exchanges are the same in general, the term “established by
the State” in §36B makes plain that they differ when it comes to
tax credits in particular.

															The Court’s next bit of interpretive
jiggery-pokery involves other parts of the Act that purportedly
presuppose the availability of tax credits on both federal and
state Exchanges. Ante, at 13–14. It is curious that the
Court is willing to subordinate the express words of the section
that grants tax credits to the mere implications of other
provisions with only tangential connections to tax credits. One
would think that interpretation would work the other way around. In
any event, each of the provisions mentioned by the Court is
perfectly consistent with limiting tax credits to state Exchanges.
One of them says that the minimum functions of an Exchange include
(alongside several tasks that have nothing to do with tax credits)
setting up an electronic calculator that shows “the actual cost of
coverage after the application of any premium tax credit.” 42
U. S. C. §18031(d)(4)(G). What stops a federal Exchange’s
electronic calculator from telling a customer that his tax credit
is zero? Another provision requires an Exchange’s outreach program
to educate the public about health plans, to facilitate enrollment,
and to “distribute fair and impartial information” about enrollment
and “the availability of premium tax credits.” §18031(i)(3)(B).
What stops a federal Exchange’s outreach program from fairly and
impartially telling customers that no tax credits are available? A
third provision requires an Exchange to report information about
each insurance plan sold—including level of coverage, premium, name
of the insured, and “amount of any advance payment” of the tax
credit. 26 U. S. C. §36B(f)(3). What stops a federal
Exchange’s report from confirming that no tax credits have been
paid out?

															The Court persists that these provisions “would
make little sense” if no tax credits were available on federal
Exchanges. Ante, at 14. Even if that observation were true,
it would show only oddity, not ambiguity. Laws often include
unusual or mismatched provisions. The Affordable Care Act spans 900
pages; it would be amazing if its provisions all lined up perfectly
with each other. This Court “does not revise legislation
. . . just because the text as written creates an
apparent anomaly.” Michigan v. Bay Mills Indian
Community , 572 U. S. ___, ___ (2014) (slip op., at 10). At
any rate, the provisions cited by the Court are not particularly
unusual. Each requires an Exchange to perform a standardized series
of tasks, some aspects of which relate in some way to tax credits.
It is entirely natural for slight mismatches to occur when, as
here, lawmakers draft “a single statutory provision” to cover
“different kinds” of situations. Robers v. United
States , 572 U. S. ___, ___ (2014) (slip op., at 4).
Lawmakers need not, and often do not, “write extra language
specifically exempting, phrase by phrase, applications in respect
to which a portion of a phrase is not needed.” Ibid. Roaming even farther afield from §36B, the Court
turns to the Act’s provisions about “qualified individuals.” Ante, at 10–11. Qualified individuals receive favored
treatment on Exchanges, although customers who are not qualified
individuals may also shop there. See Halbig v. Burwell , 758 F. 3d 390, 404–405 (CADC 2014). The Court
claims that the Act must equate federal and state establishment of
Exchanges when it defines a qualified individual as someone who
(among other things) lives in the “State that established the
Exchange,” 42 U. S. C. §18032(f )(1)(A). Otherwise,
the Court says, there would be no qualified individuals on federal
Exchanges, contradicting (for example) the provision requiring
every Exchange to takethe “ ‘interests of qualified
individuals’ ” into accountwhen selecting health plans. Ante, at 11 (quoting §18031(e)(1)(b)). Pure applesauce.
Imagine that a university sends around a bulletin reminding every
professor to take the “interests of graduate students” into account
when setting office hours, but that some professors teach only
undergraduates. Would anybody reason that the bulletin implicitly
presupposes that every professor has “graduate students,” so that
“graduate students” must really mean “graduate or undergraduate
students”? Surely not. Just as one naturally reads instructions
aboutgraduate students to be inapplicable to the extent a
particular professor has no such students, so too would one
naturally read instructions about qualified individuals to be
inapplicable to the extent a particular Exchange has no such
individuals. There is no need to rewrite the term “State that
established the Exchange” in the definition of “qualified
individual,” much less a need to rewrite the separate term
“Exchange established by the State” in a separate part of the
Act.

															Least convincing of all, however, is the Court’s
attempt to uncover support for its interpretation in “the structure
of Section 36B itself.” Ante, at 19. The Court finds it
strange that Congress limited the tax credit to state Exchanges in
the formula for calculating the amount of the credit, rather
than in the provision defining the range of taxpayers eligible for the credit. Had the Court bothered to look at
the rest of the Tax Code, it would have seen that the structure it
finds strange is in fact quite common. Consider, for example, the
many provisions that initially make taxpayers of all incomes
eligible for a tax credit, only to provide later that the amount of
the credit is zero if the taxpayer’s income exceeds a specified
threshold. See, e.g., 26 U. S. C. §24 (child tax
credit); §32 (earned-income tax credit); §36 (first-time-homebuyer
tax credit). Or consider, for an even closer parallel, a
neighboring provision that initially makes taxpayers of all States
eligible for a credit, only to provide later that the amount of the
credit may be zero if the taxpayer’s State does not satisfy certain
requirements. See §35 (health-insurance-costs tax credit). One
begins to get the sense that the Court’s insistence on reading
things in context applies to “established by the State,” but to
nothing else.

															For what it is worth, lawmakers usually draft
tax-credit provisions the way they do— i.e. , the way they
drafted §36B—because the mechanics of the credit require it. Many
Americans move to new States in the middle of the year. Mentioning
state Exchanges in the definition of “coverage month”—rather than
(as the Court proposes) in the provisions concerning taxpayers’
eligibility for the credit—accounts for taxpayers who live in a
State with a state Exchange for a part of the year, but a State
with a federal Exchange for the rest of the year. In addition, §36B
awards a credit with respect to insurance plans “which cover the
taxpayer, the taxpayer’s spouse, or any dependent . . . of the taxpayer and which were enrolled in
through an Exchange established by the State.” §36B(b)(2)(A)
(emphasis added). If Congress had mentioned state Exchanges in the
provisions discussing taxpayers’ eligibility for the credit, a
taxpayer who buys insurance from a federal Exchange would get no
money, even if he has a spouse or dependent who buys insurance from
a state Exchange—say a child attending college in a different
State. It thus makes perfect sense for “Exchange established by the
State” to appear where it does, rather than where the Court
suggests. Even if that were not so, of course, its location would
not make it any less clear.

															The Court has not come close to presenting the
compelling contextual case necessary to justify departing from the
ordinary meaning of the terms of the law. Quite the contrary,
context only underscores the outlandishness of the Court’s
interpretation. Reading the Act as a whole leaves no doubt about
the matter: “Exchange established by the State” means what it looks
like it means.

															III

															For its next defense of the indefensible, the
Court turns to the Affordable Care Act’s design and purposes. As
relevant here, the Act makes three major reforms. The
guaranteed-issue and community-rating requirements prohibit
insurers from considering a customer’s health when deciding whether
to sell insurance and how much to charge, 42 U. S. C.
§§300gg, 300gg–1; its famous individ-ual mandate requires everyone
to maintain insurance coverage or to pay what the Act calls a
“penalty,” 26 U. S. C. §5000A(b)(1), and what we have
nonetheless called a tax, see National Federation of Independent
Business v. Sebelius , 567 U. S. ___, ___ (2012)
(slip op., at 39); and its tax credits help make insurance more
affordable. The Court reasons that Congress intended these three
reforms to “work together to expand insurance coverage”; and
because the first two apply in every State, so must the third. Ante, at 16.

															This reasoning suffers from no shortage of
flaws. To begin with, “even the most formidable argument concerning
the statute’s purposes could not overcome the clarity [of ]
the statute’s text.” Kloeckner v. Solis , 568
U. S. ___, ___, n. 4 (2012) (slip op., at 14, n. 4).
Statutory design and purpose matter only to the extent they help
clarify an otherwise ambiguous provision. Could anyone maintain
with a straight face that §36B is unclear? To mention just the
highlights, the Court’s interpretation clashes with a statutory
definition, renders words inoperative in at least seven separate
provisions of the Act, overlooks the contrast between provisions
that say “Exchange” and those that say “Exchange established by the
State,” gives the same phrase one meaning for purposes of tax
credits but an entirely different meaning for other purposes, and
(let us not forget) contradicts the ordinary meaning of the words
Congress used. On the other side of the ledger, the Court has come
up with nothing more than a general provision that turns out to be
controlled by a specific one, a handful of clauses that are
consistent with either understanding of establishment by the State,
and a resemblance between the tax-credit provision and the rest of
the Tax Code. If that is all it takes to make something ambiguous,
everything is ambiguous.

															Having gone wrong in consulting statutory
purpose at all, the Court goes wrong again in analyzing it. The
purposes of a law must be “collected chiefly from its words,” not
“from extrinsic circumstances.” Sturges v. Crowninshield , 4 Wheat. 122, 202 (1819) (Marshall,
C. J.). Only by concentrating on the law’s terms can a judge
hope to uncover the scheme of the statute , rather than some
other scheme that the judge thinks desirable. Like it or not, the
express terms of the Affordable Care Act make only two of the three
reforms mentioned by the Court applicable in States that do not
establish Exchanges. It is perfectly possible for them to operate
independently of tax credits. The guaranteed-issue and
community-rating requirements continue to ensure that insurance
companies treat all customers the same no matter their health, and
the individual mandate continues to encourage people to maintain
coverage, lest they be “taxed.”

															The Court protests that without the tax credits,
the number of people covered by the individual mandate shrinks, and
without a broadly applicable individual mandate the
guaranteed-issue and community-rating requirements “would
destabilize the individual insurance market.” Ante, at 15.
If true, these projections would show only that the statutory
scheme contains a flaw; they would not show that the statute means
the opposite of what it says. Moreover, it is a flaw that appeared
as well in other parts of the Act. A different title established a
long-term-care insurance program with guaranteed-issue and
community-rating requirements, but without an individual mandate or
subsidies. §§8001–8002, 124Stat. 828–847 (2010). This program never
came into effect “only because Congress, in response to actuarial
analyses predicting that the [program] would be fiscally
unsustainable, repealed the provision in 2013.” Halbig , 758
F. 3d, at 410. How could the Court say that Congress would
never dream of combining guaranteed-issue and community-rating
requirements with a narrow individual mandate, when it combined
those requirements with no individual mandate in the context
of long-term-care insurance?

															Similarly, the Department of Health and Human
Services originally interpreted the Act to impose guaranteed-issue
and community-rating requirements in the Federal Territories, even
though the Act plainly does not make the individual mandate
applicable there. Ibid. ; see 26 U. S. C.
§5000A(f)(4); 42 U. S. C. §201(f). “This combination,
predictably, [threw] individual insurance markets in the
territories into turmoil.” Halbig, supra, at 410. Responding
to complaints from the Territories, the Department at first
insisted that it had “no statutory authority” to address the
problem and suggested that the Territories “seek legislative relief
from Congress” instead. Letter from G. Cohen, Director of the
Center for Consumer Information and Insurance Oversight, to S.
Igisomar, Secretary of Commerce of the Commonwealth of Northern
Mariana Islands (July 12, 2013). The Department changed its mind a
year later, after what it described as “a careful review of [the]
situation and the relevant statutory language.” Letter from M.
Tavenner, Administrator of the Centers for Medicare and Medicaid
Services, to G. Francis, Insurance Commissioner of the Virgin
Islands (July 16, 2014). How could the Court pronounce it
“implausible” for Congress to have tolerated instability in
insurance markets in States with federal Exchanges, ante, at
17, when even the Government maintained until recently that
Congress did exactly that in American Samoa, Guam, the Northern
Mariana Islands, Puerto Rico, and the Virgin Islands?

															Compounding its errors, the Court forgets that
it is no more appropriate to consider one of a statute’s purposes
in isolation than it is to consider one of its words that way. No
law pursues just one purpose at all costs, and no statutory scheme
encompasses just one element. Most relevant here, the Affordable
Care Act displays a congressional preference for state
participation in the establishment of Exchanges: Each State gets
the first opportunity to set up its Exchange, 42 U. S. C.
§18031(b); States that take up the opportunity receive federal
funding for “activities . . . related to establishing” an
Exchange, §18031(a)(3); and the Secretary may establish an Exchange
in a State only as a fallback, §18041(c). But setting up and
running an Exchange involve significant burdens—meeting strict
deadlines, §18041(b), implementing requirements related to the
offering of insurance plans, §18031(d)(4), setting up outreach
programs, §18031(i), and ensuring that the Exchange is
self-sustaining by 2015, §18031(d)(5)(A). A State would have much
less reason to take on these burdens if its citizens could receive
tax credits no matter who establishes its Exchange. (Now that the
Internal Revenue Service has interpreted §36B to authorize tax
credits everywhere, by the way, 34 States have failed to set up
their own Exchanges. Ante, at 6.) So even if making credits
available on all Exchanges advances the goal of improving
healthcare markets, it frustrates the goal of encouraging state
involvement in the implementation of the Act. This is what
justifies going out of our way to read “established by the State”
to mean “established by the State or not established by the
State”?

															Worst of all for the repute of today’s decision,
the Court’s reasoning is largely self-defeating. The Court predicts
that making tax credits unavailable in States that do not set up
their own Exchanges would cause disastrous economic consequences
there. If that is so, however, wouldn’t one expect States to react
by setting up their own Exchanges? And wouldn’t that outcome
satisfy two of the Act’s goals rather than just one: enabling the
Act’s reforms to work and promoting state involvement in the
Act’s implementation? The Court protests that the very existence of
a federal fallback shows that Congress expected that some States
might fail to set up their own Exchanges. Ante, at 19. So it
does. It does not show, however, that Congress expected the number
of recalcitrant States to be particularly large. The more accurate
the Court’s dire economic predictions, the smaller that number is
likely to be. That reality destroys the Court’s pretense that
applying the law as written would imperil “the viability of the
entire Affordable Care Act.” Ante, at 20. All in all, the
Court’s arguments about the law’s purpose and design are no more
convincing than its arguments about context.

															IV

															Perhaps sensing the dismal failure of its
efforts to show that “established by the State” means “established
by the State or the Federal Government,” the Court tries to palm
off the pertinent statutory phrase as “inartful drafting.” Ante, at 14. This Court, however, has no free-floating power
“to rescue Congress from its drafting errors.” Lamie v. United States Trustee , 540 U. S. 526, 542 (2004)
(internal quotation marks omitted). Only when it is patently
obvious to a reasonable reader that a drafting mistake has occurred
may a court correct the mistake. The occurrence of a misprint may
be apparent from the face of the law, as it is where the Affordable
Care Act “creates three separate Section 1563s.” Ante, at
14. But the Court does not pretend that there is any such
indication of a drafting error on the face of §36B. The occurrence
of a misprint may also be apparent because a provision decrees an
absurd result—a consequence “so monstrous, that all mankind would,
without hesitation, unite in rejecting the application.” Sturges , 4 Wheat., at 203. But §36B does not come remotely
close to satisfying that demanding standard. It is entirely
plausible that tax credits were restricted to state Exchanges
deliberately—for example,in order to encourage States to establish
their own Exchanges. We therefore have no authority to dismiss the
terms of the law as a drafting fumble.

															Let us not forget that the term “Exchange
established by the State” appears twice in §36B and five more times
in other parts of the Act that mention tax credits. What are the
odds, do you think, that the same slip of the pen occurred in seven
separate places? No provision of the Act—none at all—contradicts
the limitation of tax credits to state Exchanges. And as I have
already explained, uses of the term “Exchange established by the
State” beyond the context of tax credits look anything but
accidental. Supra, at 6. If there was a mistake here,
context suggests it was a substantive mistake in designing this
part of the law, not a technical mistake in transcribing it.

															V

															The Court’s decision reflects the philosophy
that judges should endure whatever interpretive distortions it
takes in order to correct a supposed flaw in the statutory
machinery. That philosophy ignores the American people’s decision
to give Congress “[a]ll legislative Powers” enumerated in
the Constitution. Art. I, §1. They made Congress, not this Court,
responsible for both making laws and mending them. This Court holds
only the judicial power—the power to pronounce the law as Congress
has enacted it. We lack the prerogative to repair laws that do not
work out in practice, just as the people lack the ability to throw
us out of office if they dislike the solutions we concoct. We must
always remember, therefore, that “[o]ur task is to apply the text,
not to improve upon it.” Pavelic & LeFlore v. Marvel
Entertainment Group, Div. of Cadence Industries Corp. , 493
U. S. 120, 126 (1989) .

															Trying to make its judge-empowering approach
seem respectful of congressional authority, the Court asserts that
its decision merely ensures that the Affordable Care Act operates
the way Congress “meant [it] to operate.” Ante, at 17. First
of all, what makes the Court so sure that Congress “meant” tax
credits to be available everywhere? Our only evidence of what
Congress meant comes from the terms of the law, and those terms
show beyond all question that tax credits are available only on
state Exchanges. More importantly, the Court forgets that ours is a
government of laws and not of men. That means we are governed by
the terms of our laws, not by the unen-acted will of our lawmakers.
“If Congress enacted into law something different from what it
intended, then it should amend the statute to conform to its
intent.” Lamie , supra , at 542. In the meantime, this
Court “has no roving license . . . to disregard clear
language simply on the view that . . . Congress ‘must
have intended’ something broader.” Bay Mills , 572
U. S., at ___ (slip op., at 11).

															Even less defensible, if possible, is the
Court’s claim that its interpretive approach is justified because
this Act “does not reflect the type of care and deliberation that
one might expect of such significant legislation.” Ante, at
14–15. It is not our place to judge the quality of the care and
deliberation that went into this or any other law. A law enacted by
voice vote with no deliberation whatever is fully as binding upon
us as one enacted after years of study, months of committee
hearings, and weeks of debate. Much less is it our place to make
everything come out right when Congress does not do its job
properly. It is up to Congress to design its laws with care, and it
is up to the people to hold them to account if they fail to carry
out that responsibility.

															Rather than rewriting the law under the pretense
of interpreting it, the Court should have left it to Congress to
decide what to do about the Act’s limitation of tax credits to
state Exchanges. If Congress values above everything else the Act’s
applicability across the country, it could make tax credits
available in every Exchange. If it prizes state involvement in the
Act’s implementation, it could continue to limit tax credits to
state Exchanges while taking other steps to mitigate the economic
consequences predicted by the Court. If Congress wants to
accommodate both goals, it could make tax credits available
everywhere while offering new incentives for States to set up their
own Exchanges. And if Congress thinks that the present design of
the Act works well enough, it could do nothing. Congress could also
do something else alto-gether, entirely abandoning the structure of
the Affordable Care Act. The Court’s insistence on making a choice
that should be made by Congress both aggrandizes judicial power and
encourages congressional lassitude.

															Just ponder the significance of the Court’s
decision to take matters into its own hands. The Court’s revision
of the law authorizes the Internal Revenue Service to spend tens of
billions of dollars every year in tax credits on federal Exchanges.
It affects the price of insurance for millions of Americans. It
diminishes the participation of the States in the implementation of
the Act. It vastly expands the reach of the Act’s individual
mandate, whose scope depends in part on the availability of
credits. What a parody today’s decision makes of Hamilton’s
assurances to the people of New York: “The legislature not only
commands the purse but prescribes the rules by which the duties and
rights of every citizen are to be regulated. The judiciary, on the
contrary, has no influence over . . . the purse; no
direction . . . of the wealth of society, and can take no
active resolution whatever. It may truly be said to have neither
force nor will but merely judgment.” The Federalist No. 78, p. 465
(C. Rossiter ed. 1961).

															*  *  *

															Today’s opinion changes the usual rules of
statutory interpretation for the sake of the Affordable Care Act.
That, alas, is not a novelty. In National Federation of
Independent Business v. Sebelius , 567 U. S. ___,
this Court revised major components of the statute in order to save
them from unconstitutionality. The Act that Congress passed
provides that every individual “shall” maintain insurance or else
pay a “penalty.” 26 U. S. C. §5000A. This Court, however,
saw that the Commerce Clause does not authorize a federal mandate
to buy health insurance. So it rewrote the mandate-cum-penalty as a
tax. 567 U. S., at ___–___ (principal opinion) (slip op., at
15–45). The Act that Congress passed also requires every State to
accept an expansion of its Medicaid program, or else risk losing all Medicaid funding. 42 U. S. C. §1396c. This
Court, however, saw that the Spending Clause does not authorize
this coercive condition. So it rewrote the law to withhold only the incremental funds associated with the Medicaid expansion.
567 U. S., at ___–___ (principal opinion) (slip op., at
45–58). Having transformed two major parts of the law, the Court
today has turned its attention to a third. The Act that Congress
passed makes tax credits available only on an “Exchange established
by the State.” This Court, however, concludes that this limitation
would prevent the rest of the Act from working as well as hoped. So
it rewrites the law to make tax credits available everywhere. We
should start calling this law SCOTUScare.

															Perhaps the Patient Protection and Affordable
Care Act will attain the enduring status of the Social Security Act
or the Taft-Hartley Act; perhaps not. But this Court’s two
decisions on the Act will surely be remembered through the years.
The somersaults of statutory interpretation they have performed
(“penalty” means tax, “further [Medicaid] payments to the State”
means only incremental Medicaid payments to the State, “established
by the State” means not established by the State) will be cited by
litigants endlessly, to the confusion of honest jurisprudence. And
the cases will publish forever the discouraging truth that the
Supreme Court of the United States favors some laws over others,
and is prepared to do whatever it takes to uphold and assist its
favorites.

															I dissent.