The ACA legislation includes the language "enrolled in through an Exchange established by the State under 1311". As implemented by the IRS, ACA regulations use a more broad definition encompassing both the state exchanges and the federal exchanges set up under section 1321. The legislation includes the phrase "established by the State under 1311" in nine different locations.
Internal Revenue Code section 36B, enacted as part of the ACA, includes the following provision:
In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.
(2) (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, the taxpayer's spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311  of the Patient Protection and Affordable Care Act, [...]
|Secretary Burwell with President Obama|
The defendant, which is essentially the federal government embodied by the current Secretary of Health and Human Services, Sylvia Mathews Burwell, is arguing that the intent of the law should carry more wight than the wording.
Meanwhile, President Obama, much to his discredit, is on a King v Burwell speaking tour of sorts, trying to win in the court of public opinion and perhaps even influence the esteemed members of the Supreme Court. Here's what Obama said monday in Austria, according to the Wall Street Journal:
"There is no reason why the existing exchanges should be overturned through a court case. It has been well documented that those who passed this legislation never intended for folks who were going through the federal exchange not to have their citizens get subsidies,” Mr. Obama averred. That conveniently ignores comments by ObamaCare architect Jonathan Gruber,..."
You may recall that Jonathan Gruber, an MIT Economist who was one of the key architects of the Affordable Care Act, said on more than one occasion that they took advantage of the "stupidity of the American voters" in getting the bill passed. But that's not even what the WSJ staff was referencing when they invoked his name. Instead they were referring to separate statements he made on January 10, 2012 and January 18, 2012. See the key parts of both statements below:
From Jan 10 statement according to Reason.com:
"...by not setting up an exchange, the politicians of a state are costing state residents hundreds and millions and billions of dollars....That is really the ultimate threat, is, will people understand that, gee, if your governor doesn't set up an exchange, you're losing hundreds of millions of dollars of tax credits to be delivered to your citizens." - Johnathan Gruber
From Jan 18 statement according to Reason.com:
—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this." - Johnathan Gruber
Clearly the ACA architects intended to coerce the states into setting up their own exchanges. And clearly that plan backfired as only 16 states set up exchanges. That's when the powers that be in the administration decided to flout the law they had pushed through Congress and provide the subsides anyway, in direct violation of the law.
President Obama still sees nothing wrong with that. In fact, he even backhandedly criticized the Supreme Court for even taking the case and at the same time suggested that they quickly do what most smart people would do when he recently said:
"And so this should be an easy case. Frankly, it probably shouldn’t even have been taken up. And since we’re going to get a ruling pretty quick, I think it’s important for us to go ahead and assume that the Supreme Court is going to do what most legal scholars who’ve looked at this would expect them to do.”
If you've ever wondered what elitism was, the quote above is as good an example of it as you'll ever see. Mr. Obama is suggesting that the opinions of so-called legal scholars (that share his view of course) should be the guiding light.
Well, I'm no legal scholar, so pardon me for having an opinion, but it seems to me that if a law is written, explicitly requiring condition X to be in place before Y can happen, it would be quite easy, even for a layman like me, to determine whether the existence of Y was legal or not.
I hope the Supreme Court agrees.