Obamacare: awesome for people who need insurance. Not so much for conservative SCOTUS.
It has not been a good week for the plaintiffs in
King v. Burwell. For those who have missed out on the latest existential threat to the Affordable Care Act, the plaintiffs in the
King case, which will be heard by the Supreme Court in the coming months, argue that the subsidies provided to those enrolled in a plan on the federal exchange are illegal. The claim is based on what amounts to
little more than a drafting error, and the possible ambiguity the error creates is settled repeatedly elsewhere in the text. Nevertheless, the plaintiffs have argued that through the law, Congress actually intended not to grant subsidies on the federal exchange in order to compel states to set up their own exchange. The fact that neither the Obama administration nor Congress ever attempted to use this particular quirk of language to compel states to establish their own marketplaces, or that nobody ever made this argument until some conservatives realized that it had at least a chance at undermining the Affordable Care Act, is seemingly irrelevant: the plaintiffs are seeking to convince the Supreme Court that they know the intent of the law better than the people who wrote it.
If the plaintiffs prevail, subsidies will be removed, which will make insurance unaffordable for many people who have plans on the federal exchanges and could lead to a premium death spiral that could threaten the entire law. Unfortunately for those who want to take away people's health insurance, their main argument has taken a bit of a hit. More below the fold.
A brief submitted by the plaintiffs as evidence of the desire on the part of Congress not to let participants in the federal exchange receive subsidies argues that certain senators, especially the former Democratic senator from Nebraska, Ben Nelson, were so adamant about keeping the federal government out of the marketplace through the creation of state exchanges that it just wouldn't have made any sense for the Senate version of the Affordable Care Act to allow for subsidies on the federal exchange:
"For Nelson and some other Senators, it was important to keep the federal government out of the process, and thus insufficient to merely allow states the option to establish Exchanges, as the House bill did,” a brief by the lawsuit’s plaintiffs argues. “Rather, states had to take the lead role, which, given the constitutional bar on compulsion, required serious incentives to induce such state participation.”
If it sounds ridiculous, that's because it is ridiculous. The plaintiffs are arguing that the issue of creating a strong incentive for the states by forbidding federal exchange subsidies was crucial to the senators who passed the final version of the Affordable Care Act, and yet they totally forgot to write such an explicit proviso into the bill and did not raise one iota of complaint about it during the entire time that the IRS has been administering the subsidies.
Sen. Nelson, however, was not happy about seeing the King plaintiffs take his name in vain, and recently wrote a letter to Senator Casey (D-PA) rebutting the claim:
As you may recall, during debate of the Affordable Care Act, I objected to the House of Representatives proposal to have a single federally-run exchange, and advocated instead for the flexibility to the states to establish state-based exchanges with a federal exchange as a backup if a state was either unable or unwilling to create an exchange.
...
In either scenario - a state or a federal exchange - our purpose was clear: to provide states the tools necessary to deliver affordable healthcare to their citizens, and clearly the subsidies are a critical component of that effort regardless of which exchange type a state chooses. I alwaysbelieved that tax credits should be available in all 50 states regardless of who built the exchange, and the final law also reflects that belief as well.
The entire premise of the plaintiffs' case has been thoroughly debunked. And even were the Roberts Court to act like its predecessors in
Bush v. Gore by ignoring anything resembling law and precedent in order to further the political goal of destroying the Affordable Care Act, there are still logistical ramifications to consider that go far beyond the court's reputation. By better than a 2-to-1 margin, people living in states served by a federal exchange
want to see a state exchange created in case the
King plaintiffs are successful so that subsidies can continue—including a majority of Republicans. In fact, one of the arguments that the
King plaintiffs make is that if subsidies are denied to the federal exchange, then states will have incentive to create their own system as the law intended. But as Gov. Scott Walker (R-WI) recently
demonstrated, it is highly unlikely that states with Republican leadership will create an exchange that can legally assume the responsibility of providing the subsidies, precisely because doing so would be seen as abetting President Obama.
In short, if King prevails, subsidies will be removed, states will not create their own exchanges so that policyholders can continue to receive subsidies, and the law will be at significant risk of failing (which, of course, is the whole point of the challenge in the first place). But have the Republicans come up with anything that could alleviate the burden for the millions who suddenly find themselves unable to afford insurance, or for the potential systemic shock that a King victory might create? Of course not.
Given all of this, it's interesting to wonder what exactly a majority decision for the plaintiffs would look like. Keep in mind that the Supreme Court is not seeking to determine the constitutionality of the subsidies, but is instead examining a possible ambiguity in the interpretation of a constitutional statute passed by Congress. The standard protocol for such situations is the so-called Chevron framework, in which substantial deference in such cases of ambiguity is given to the executive agency responsible for enforcing the law. It would have to read something like this:
In reviewing the King case through the Chevron Deference framework, we find that the Congress unambiguously chose to outlaw subsidies for health plans on the federal exchanges. We make this finding even though twice as many federal judges have agreed with the government as with the plaintiffs—which might seem to suggest ambiguity, but who cares? We further make this finding even though the core senator in the plaintiff's case has explicitly sided with the defense, as have 75 other federal and state lawmakers. We understand that this unprecedented judicial overreach will make insurance unaffordable for millions. We further understand that even though plaintiffs have argued that the states can and will pick up the slack to keep subsidies flowing, the Republicans in charge of those states would rather die than do anything that could be considered acceding to President Obama. Likewise, we also understand that the absurdly narrow scope of our ruling could have the unintended consequence of stripping millions of children of their health insurance by ruling illegal a very similar statute that nobody had cared enough to challenge, but you mistook us for people who care. We acknowledge that the current Congress has absolutely no plan to replace the insurance we're about to take away, but that matters far less to us than trying to succeed at one last-gasp attempt to annihilate the legacy of a president we don't like. Therefore, we hereby find for the plaintiffs that subsidies on the federal exchange are illegal. It is so ordered.
Now that would be quite the defining legacy for the Roberts Court, wouldn't it?