Last week’s Supreme Court arguments on ObamaCare struck me as a bit irrelevant, and not just because the case won’t impact New York.
The case is about whether federal subsidies are actually legal in states that didn’t set up their own insurance exchanges — but the truth is, ObamaCare is a bad deal even with the subsidies.
Down here in the medical trenches, the harsh reality of the Affordable Care Act continues to play out.
One of the most anticipated cases of the Supreme Court’s 2014-2015 term is King v. Burwell. In it, the Supreme Court is confronted with what should be a straightforward question of statutory interpretation about the scope of subsidies available under the Affordable Care Act (ACA). Section 1311 of the ACA states that “each state shall, not later than January 1, 2014, establish an American Health Benefit Exchange.” Another part of the law, section 1321, then qualifies that apparently absolute duty by providing that if the state does not “elect” to establish that exchange by January 1, 2014, or if it otherwise fails to meet the federal requirements for an exchange, “the Secretary [of HHS] shall . . . establish and operate such exchange within the state.”
The question of whether a state establishes this exchange determines far more than where individuals can buy their health care coverage. It also determines whether any purchaser of health insurance is entitled to a tax credit against his or her cost of coverage, as that subsidy is limited to taxpayers who are enrolled in a qualifying plan “through an Exchange established by the state” under Section 1311. Internal Revenue Service regulations interpreted the ACA requirement so that its tax subsidies were available to all individuals whether they enrolled in an exchange established by the state or by HHS when the state elected or failed to do so. The plaintiffs’ challenge to the regulation was in essence that the plain language of the ACA precluded the IRS from expanding the scope of the subsidy by this sleight of hand. King would have been an open-and-shut victory for the plaintiffs if the disputed interpretation had been some run-of-the-mill tax provision. But 36 states did not establish these exchanges because they wanted to guarantee their citizens the statutory tax breaks.
I haven’t commented much on the issues at play in the latest Obamacare case to reach the Supreme Court, mostly because there are so many lawyer-bloggers and health care pundits on the internet offering more informed takes than mine. But now duty calls, so here is my pundit’s view of things:
1) Having gone back and forth over the evidence presented, I’m not convinced by the plaintiffs’ argument that the people responsible for drafting for Obamacare consciously intended to limit subsidies in order to induce states to set up their own exchanges. The famous comments suggesting that they did, from Jonathan Gruber and others, make me suspect that this possibility floated somewhere in the Obamacare hive mind, and the much-discussed path that different versions of the bill took through the Senate allows room for the possibility that somebody involved with the process had that idea in mind, and that this person’s sense of how the law ought to work played some role in why the language that we have ended up in there. But the extent that we’re talking about the intent of the drafters as a collaborative group, my sense is that they’re telling the truth about having no such plan in mind, and thus that the text as we have it is the result of accident and oversight and blundering rather than design.
Chief Justice Roberts has said he likes mystery novels; once, as a lower-court judge, he invoked Sherlock Holmes’s “dog that didn’t bark.” But at the King v. Burwell arguments, Roberts himself was in effect the dog that didn’t bark, saying far less than expected and thus leaving reporters to puzzle over the mystery of how he might vote.
But the one question he did ask about statutory interpretation does merit particular notice, as the Washington Post’s Robert Barnes notes. It pertains to “Chevron deference” — the doctrine under which the Court generally should defer to an agency’s reasonable interpretation of an ambiguously worded statute.
Supreme Court Justice Antonin Scalia has given Republicans new ammunition in the fight over ObamaCare by endorsing the idea that Congress is certain to act if the court deals a blow to the law.
The conservative justice contended Wednesday that lawmakers would move quickly if the court, in the case of King v. Burwell, were to strike down subsidies that are helping millions of people purchase insurance through the federal exchange, HealthCare.gov.
The Supreme Court justices had a lively discussion yesterday during arguments in King v. Burwell about who Congress intended to get health insurance subsidies and under what conditions.
The central question is whether the Internal Revenue Service had the authority to write a rule authorizing subsidies to go to millions of people in the 37 states now operating under federal exchanges.
The plaintiffs say the language of the law is clear: Subsidies are allowed in “an Exchange established by the State under [section] 1311of the Patient Protection and Affordable Care Act.” It doesn’t just say this once, but nine times in various linguistic forms.
The government argues that it is just a typo in legislative drafting: Congress clearly wanted subsidies to be available to citizens of all of the states, and the IRS therefore had the authority to write its rule authorizing subsidies in both federal and state exchanges.
Today, the Supreme Court heard oral arguments in King v. Burwell, a case with significant implications for the future of Obamacare. Most of the justices’ questions proceeded along expected lines. Most notable was a series of questions by Associate Justice Anthony Kennedy, who questioned whether it would be constitutional for Obamacare to induce states to set up exchanges. If Kennedy’s fears are right—that federal subsidies for state-based exchanges are “coercive”—then he might side with the Obama administration in the case. But if you understand how Obamacare’s insurance markets work, it’s clear that Kennedy should side with Obama’s challengers.
Justice Anthony Kennedy said state insurance exchanges could collapse without federal subsidies to offset the costs of insurance
Supreme Court heard an hour of oral arguments in an Obamacare challenge, will cast votes Friday, and release a decision this summer
Conservatives say law was written to deny subsidies to people in states that decided not to set up their own insurance marketplaces
The White House insists Congress meant to treat everyone equally
As many as 8 million people could lose their insurance without the subsidies, which lower the cost of insurance
GOP wants to replace subsidies with temporary financial assistance, and then new state-based systems they say would be more competitive
White House is ‘quite pleased’ with its solicitor general’s arguments
Liberals would rather pretend that conservative arguments don’t exist—at least it feels that way, sometimes. But on the eve of King v. Burwell, that is exactly what’s happening. Recognizing the significance that constitutional federalism could come to bear in interpreting the Affordable Care Act’s provisions for health insurance exchanges, some of the Administration’s defenders have begun to argue that their opponents have not even attempted to make a federalism argument in support of their challenge.
By Heather R. Higgins and Hadley Heath Manning
The Supreme Court is set to hear another case, King v. Burwell, with important implications for Obamacare. The question is whether the IRS overstepped its authority in treating the federal exchanges like state exchanges and causing subsidies to flow — and the companion penalties and mandates to apply — to consumers, governments, and organizations in federal-exchange states, despite the clear text of the law.
In advance of the March 4th hearing, the Administration and allied organizations are painting a picture of calamity – they say six, then seven, now eight million people will lose their subsidies and thus risk losing their insurance coverage if the plaintiffs win.
The clear hope is to frighten the Justices away from reading the plain language of the law, undoing the IRS administrative fiat, and restoring the law as explicitly written and intended.