Fortunately, courts do not read statutes by cherry-picking single phrases to defeat the entire purpose of laws. As Supreme Court Justice Antonin Scalia noted in an opinion issued last month, courts must bear 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.” If one views the totality of the ACA — its purpose and its other provisions — it’s clear that tax credits are available in the federal exchange.

The Affordable Care Act was meant to “provide affordable . . . coverage choices for all Americans.” A key section says, “Each state shall . . . establish an . . . Exchange,” but another section provides that if a state “elects” not to establish the “required Exchange,”the secretary of health and human services must “establish and operate such Exchange.” These sections both require states to establish exchanges and allow them not to do so.

Congress gave the IRS the responsibility to resolve such contradictions, and the IRS adopted the only reasonable approach. If a state does create the “required Exchange,” HHS steps into its shoes and sets up “such Exchange.” The law, in other words, requires the federal government to create the “Exchange established by the state,” with the same authorities and responsibilities as state exchanges, including offering premium tax credits.