Given this, you might be surprised to learn that, given all the legal challenges raised against Obamacare, none was raised challenging Section 1311 under Printz. The reason is that Section 1321 of the ACA provides an alternate mechanism for forming "exchanges" in states that does not require direct state involvement:

PART 3—STATE FLEXIBILITY RELATING TO EXCHANGES SEC. 1321; 42 U.S.C. 18041. STATE FLEXIBILITY IN OPERATION AND ENFORCEMENT OF EXCHANGES AND RELATED REQUIREMENTS. [. . .]

(c) FAILURE TO ESTABLISH EXCHANGE OR IMPLEMENT REQUIREMENTS.—

(1) IN GENERAL.—If— (A) a State [does not establish an Exchange . . . ] the Secretary shall (directly or through agreement with a not for-profit entity) establish and operate such Exchange within the State [. . .]

Thus, as you can see, when Section 1311 is read in the context of the entire statute, and in this instance, when read in concert with Section 1321, there is in fact no "Printz problem" in Section 1311, as the states are not in fact required to "establish an exchange." (Exchanges are the insurance marketplace where participants shop for insurance to meet their particular needs and means, means which include tax credits to subsidize the cost of such insurance.)

What I just demonstrated was an exercise in statutory interpretation, using universally accepted techniques of interpretation. Indeed, my interpretation is so commonplace that even when actors (Republicans) have grasped at many a novel argument to legally attack Obamacare, this has not been one of them. Which brings me to King v. Burwell, a case which, remarkably, will be argued before the U.S. Supreme Court on March 4. In King, the challengers are arguing for a rejection of the commonplace statutory interpretation techniques I've just illustrated, arguing instead for an isolated and illogical reading of 26 USC 36(b), the provision of ACA that describes the tax credits and subsidies to be provided to exchange participants.

King v Burwell is now before the Supreme Court as the challengers petitioned for cert (PDF) of the Fourth Circuit decision finding in favor of the government and ruling that federal exchanges are included in the provision of tax credit and subsidies pursuant to 26 USC 36(b), which provides, in pertinent part:

The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of— (A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer [...] and which were enrolled in through an Exchange established by the State under 1311 of [Obamacare]

In their petition for cert, the challengers present the question as follows:

Section 36B of the Internal Revenue Code, which was enacted as part of [Obamacare], authorizes federal tax credit subsidies for health insurance coverage that is purchased through an “Exchange established by the State under section 1311” of the ACA. The question presented is whether the Internal Revenue Service (“IRS”) may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through Exchanges established by the federal government under section 1321 of the ACA. [My emphasis]

Leaving aside the argumentative form of the question presented, this basically does identify the issue, to wit, does Section 36(b) exclude federal "exchanges"? Asserting that it does, the challengers argue:

[E]very canon of construction confirms that “established by the State” cannot be read to include all Exchanges, even those created by HHS. [...] On such a reading, the modifier “established by the State” in § 36B would serve no purpose, violating the “cardinal principle” that “no clause … shall be superfluous, void, or insignificant.” [cite omitted] More to the point, the problem here is not redundancy, but that § 36B specifically answers the precise question at issue[. . .]

While the challengers have other tangential arguments, this is their main thrust —the words say what they say and there is nothing more to it. An "Exchange established by the State under Section 1311" means precisely that and nothing more. There may be a superficial appeal to this argument, but it simply does not conform to the established canons of statutory interpretation. Before I provide you with the precedent that demonstrates the fatal flaw in the challengers' approach to statutory interpretation, let me first show you how the challengers' own petition shows this. In their petition, the challengers discuss the provision for the creation of state exchanges, Section 1311:

Section 1311(b)(1) of the ACA urges states, in the strongest possible terms, to establish Exchanges. It provides: “Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange … for the State.” 42 U.S.C. § 18031(b)(1). [My emphasis]

Let's stop right there. First, Section 1311, read literally and in isolation, does not "urge" states to establish Exchanges. It REQUIRES them to. There is no wiggle room in the isolated language. It is a flat and unambiguous requirement read in isolation. But we know this is not how statutory interpretation works. A statute is read in its entirety, not by snatching phrases in isolation. Thus, the challengers are forced to acknowledge that in fact, understanding Section 1311 requires reading it in concert with Section 1321:

Under the Constitution’s core federalism commands, however, Congress cannot compel sovereign states to create Exchanges. Printz v. United States, 521 U.S. 898, 935 (1997). The Act therefore recognizes that some states may not be “electing State[s],” because they may choose not “to apply the requirements” for an Exchange or otherwise “fai[l] to establish [an] Exchange.” ACA § 1321(b)-(c), codified at 42 U.S.C. § 18041(b)-(c). To address that scenario, the Act authorizes the Department of Health and Human Services (“HHS”) to establish fallback Exchanges in states that do not establish their own. In such cases, the Secretary “shall … establish and operate such Exchange within the State.” ACA § 1321(c), codified at 42 U.S.C. § 18041(c). Thus, if a state declines the role that the ACA urges it to accept, that obligation falls upon the federal government instead.

What have the challengers done here? They have altered the plain and unambiguous meaning of Section 1311, if read in isolation, from a federal command ("Each State SHALL") to instead an "urging." And they are perfectly correct in doing so. This is sound statutory interpretation. But it utterly contradicts the challengers' argument urging that Section 36(b) be read in isolation ("providing the precise answer.")

A proper reading of Section 36(b) requires the use of the same technique of statutory interpretation that the challengers applied to Section 1311. In its Responding Brief (PDF), the government provides an articulate primer of the canons of statutory interpretation and how to apply these canons to Section 36(b):

The relevant question in interpreting the language on which petitioners rely is not whether HHS is a “State.” It is whether the statutory phrase “Exchange established by the State under Section 18031” includes an Exchange that HHS establishes as a surrogate for the State, as authorized by 42 U.S.C. 18041. That question cannot be answered by a myopic focus on that phrase alone: “The plain meaning that [courts] seek to discern is the plain meaning of the whole statute, not of isolated sentences.” Beecham v. United States, 511 U.S. 368, 372 (1994). [... W]hen interpreting statutes like this one, it is especially important to respect 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.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)[. . . ] There is no such thing as a plain meaning of “an Exchange established by the State under Section 18031” that does not take into account Section 18031 and related provisions.

Precisely so. And we need look no further than the challengers' exposition regarding Section 1311 (aka Section 18031) and its literal requirement that states establish exchanges to see this. To properly understand the plain and unambiguous meaning of that "requirement," we must look to Section 1321 (aka Section 18041). So too, we must read Section36(b)'s invocation of an "Exchange established by the State under section 1311" in conjunction with Section 1321. The government's brief explains:

[T]hree statutory provisions that together set forth how Exchanges will be established and operated—Section 18031 [Section 1311], Section 18041 [Section 1321], and the Act’s definition of “Exchange”—demonstrate that an Exchange established by HHS for a particular State qualifies as “an Exchange established by the State under Section 18031.” The phrase is a statutory term of art.

In simpler terms, if the state "elects" to not comply with its Section 1311 requirement to "establish" an exchange," then under, Section 1321:

the Secretary shall [...] establish and operate such Exchange within the State

That is, the secretary will establish "such Exchange," the 1311 Exchange, within the state. As the government brief explains:

The use of the phrase “such Exchange” conveys that the Exchange to be established by HHS for the State is the “required Exchange” referenced earlier in the same sentence—that is, the Exchange “required” by Section 18031(b)(1), which provides that “each State shall * * * establish an [Exchange].” See Black’s Law Dictionary 1570 (9th ed. 2009) (“such” means “[t]hat or those; having just been mentioned”), Section 18041(c)(1) empowers HHS, acting as the legislatively authorized surrogate of the State, to establish the Exchange that Section 18031(b)(1) requires “[e]ach State” to establish. For purposes of the Act, therefore, an Exchange created for a particular State by HHS is “an Exchange established by the State under Section 18031.”

Just as the proper interpretation of Section 1311 requires reference to Section 1321 to interpret the requirement that states establish exchanges, so to does Section 36(b) require reference to Section 1321 to properly interpret the meaning of a Section 1311 exchange. The challengers recognize the former but their argument demands they inconsistently and illogically deny it for the latter. That is faulty and unsupported statutory interpretation.

The government brief drives homes this point by referring to Obamacare's definition of "exchange":

The applicable statutory definition reinforces that conclusion. “Exchange” is defined to mean “an American Health Benefit Exchange established under section 18031 [Section 1311]."

Thus, when the HHS secretary is empowered by Section 1321 to create such exchange, Obamacare is, in fact, directing the secretary to establish a "1311 Exchange," fully eligible for tax credit subsidies under Section 36(b).

What I have argued here, as you see, is a plain and unambiguous interpretation of Section 36(b) that relies solely on uncontroversial statutory interpretation canons and the relevant text of the law. I have not argued legislative history or absurdity or even typos.

A true and honest "textualist" must admit the soundness of the arguments presented by the government.

The plain and unambiguous meaning of Section 36(b) provides for tax credit subsidies on the federal exchanges.