The view that courts should read statutes to mean what they say, rather than trying to bend them to whatever “purpose” the court thinks the statute was supposed to serve, is referred to in legal circles as “textualism,” and it is a close cousin of “Originalism,” the view that courts should read the Constitution to mean what it said – and was understood to say – at the time it was written. (The principal difference being that most of the Constitution is quite old and more general than your typical statute, so courts are more apt to look at dictionaries, public debates and the like to interpret the understood meaning of terms. But in both cases, the goal is not to get inside the heads of the legislators but rather to determine the plain meaning of the language at the time it was written).

Here, the plain language of the ACA is straightforward: Section 1401 of the ACA, codified at Section 36B of the Internal Revenue Code, provides tax credit subsidies to individuals who buy insurance on exchanges “established by the State under section 1311″ of the ACA. Section 1304(d) clearly sets forth the definition of “State,” and it’s what you would expect: “the term ‘State’ means each of the 50 States and the District of Columbia.” A separate section of the ACA, section 1321, allows the federal government to “establish and operate such Exchanges within the State” if the State does not do so, and the statute nowhere provides a similar subsidy to buyers on the state exchanges or states that the federal exchange should be treated as a state exchange for purposes of the subsidies. This is not at all ambiguous.

Moreover, regardless of how strict a textualist you are, one of the rules of construction that courts typically follow most rigorously is the rule that laws should not be read so that some words in the statute are meaningless “surplusage” – that is, that the law would say the exact same thing whether those words were there or not. As Jonathan Adler notes, this is the problem with saying that an exchange “established by the State under section 1311″ includes an exchange established by the federal government established under the separate section 1321 – it would render the phrase “by the State” (and for that matter the cross-reference to section 1311) completely meaningless, since the statute would then mean the same as if it simply said “exchange established under this Title,” and yet the statute uses the term “exchange” elsewhere without adding “established by the State,” suggesting that it did so in Section 1401 for a reason. By contrast, the IRS regulation interpreting the statute gives away that game when it states that subsidies would be available “regardless of whether the Exchange is established and operated by a State”.