U.S. Supreme Court grants review in King v. Halbig: ‘Five words’ threaten the Affordable Care Act

ObamacareOn Friday afternoon, The U.S. Supreme Court granted certiorari in King v. Burwell  to decide how far the federal government can extend its program of subsidies to buyers of health insurance under the Affordable Care Act. See SCOTUSblog, Court to rule on health care subsidies .

The five words at issue are in a provision that requires the ACA’s insurance subsidies to be calculated based on premiums for individuals enrolled through an “Exchange established by the State under 1311” (ACA § 1401); the question is whether the IRS properly interpreted the ACA to allow those subsidies also to be available on federally operated exchanges (which now are the majority of exchanges). (Abbe Gluckman, Yale Law professor).

As Joey Fishkin observes at the Balkinization Blog, “As a matter of statutory interpretation, the plaintiffs’ argument in King v. Burwell [and Halbig v. Burwell] —that the ACA as a whole clearly requires no subsidies to go to anybody in a state with a federal exchange—is sufficiently implausible that I think it is fair to characterize it as fundamentally a political argument.” States’ rights—to block the flow of federal funds to their citizens?

This has the fingerprints of Justice Antonin Scalia all over it. Scalia is a proponent of Textualism, “holding that a statute’s ordinary meaning should govern its interpretation, as opposed to inquiries into non-textual sources such as the intention of the legislature in passing the law, the problem it was intended to remedy, or substantive questions of the justice and rectitude of the law.”

When a statute is clear and unambiguous, the inquiry into legislative intent ends. But when a statutory provision is ambiguous or may be interpreted in more than one fashion, or if it would lead to a conflict with or illogical result with another provision of the statute, then legislative intent must be inferred from sources other than the actual text of the statute, for example, the legislative history and Congressional record.

I recommend that you read Yale Law Professor Abbe Gluck at SCOTUSblog for a more detailed discussion. Symposium: The grant in King – Obamacare subsidies as textualism’s big test . “Let’s cast aside the red herring of untethered purpose, and ask the question that gives King significance beyond the politics of health reform (and is a reason for the Court to avoid those politics): Will the Court follow, what Justice Scalia just five months ago (in Utility Air Regulatory Group v. EPA) called ‘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’?”

The plaintiffs in King v. Burwell and Halbig v. Burwell claim a drafting error in the Affordable Care Act, and by virtue of this drafting error, they seek to undermine the operation of the insurance exchanges by limiting the tax subsidies to state-run insurance marketplaces. The insurance marketplaces would collapse.

The Libertarian lawyers representing the plaintiffs have expressly said this lawsuit is for the purpose of destroying “ObamaCare.” They make no attempt to hide their political motivations.

Under normal circumstances, Congress would simply pass a corrective amendment to clarify the statutory language. There would be no need for these costly lawsuits. It certainly does not rise to the level of a Supreme Court case. But we do not live in normal times. Republicans in Congress are hellbent on destroying “ObamaCare” and denying millions of their constituents access to affordable health care.

Another remedy would be for the states that participate in the federal exchange to set up their own state-run exchanges. But Republicans also took over state legislatures and governorships on Tuesday. (If you want a state-run exchange in Arizona, you will have to do it by citizens initiative).

Republicans in Congress and the conservative majority on the Court see this as a political opportunity to undermine the ACA health insurance exchanges and to destroy “ObamaCare” in the courts — something they have been unable to achieve legislatively. This is pure politics. And it undermines the integrity of the judicial system.

There is currently no conflict among the circuits on the question for which cert was granted. The Fourth Circuit ruled against the plaintiffs in King v. Burwell. The D.C. Circuit Court of Appeals vacated the opinion of its 3 judge panel in Halbig v. Burwell, and will hear the appeal en banc in December.

It is widely believed that the D.C. Circuit Court will rule against the plaintiffs, as well it should. The timing of the Supreme Court grant of cert, shortly after an Election Day in which Republicans were victorious, when there is no pressing reason for the court to take this case, is further evidence this is pure politics.

It takes four justices to grant cert. They are not identified in the order, but we know who they are: Scalia, Thomas, Alito, and Kennedy. I find it hard to believe that Chief Justice Roberts, after authoring the opinion to uphold the Affordable Care Act, would just a few short years later side with the dissenters to undermine his own opinion on such specious grounds as a radical statutory interpretation unsupported by long-standing canons of statutory interpretation. Chief Justices have a”legacy” they care about, too.

Greg Sargent explains the political implications for Republicans at the Washington Post, Obamacare in peril:

Multiple Democratic lawmakers who participated in the creation of the Affordable Care Act have explained that making subsidies available to people in all 50 states, regardless of who set up the exchanges, was always the intention. Staff members involved in the drafting of the law have said the same, and have carefully explained how the faulty language ended up as it did.

[Democratic lawmakers have submitted amicus briefs in the D.C. Circuit Court of Appeals en banc review of Halbig v. Burwell, and no doubt will do so in King v. Burwell before the U.S. Supreme Court. Justice Scalia will dismiss their arguments in favor of his textualism theory.]

But SCOTUS could still rule against the administrative rule, anyway. Nicholas Bagley explains how the fact that SCOTUS has agreed to hear the case at all doesn’t bode well, and even increases the odds that the government will lose it.

So let’s say SCOTUS does strike down the subsidies. If so, it will create an interesting situation for Republican lawmakers. It will make it impossible for them to get away with the clever game they’ve been playing for some time on their true intentions toward the law.

As the Kaiser Family Foundation’s Larry Levitt explains it, a SCOTUS ruling gutting the subsidies could easily be rendered “moot” in one of two ways: Either Congress fixes the law, or governors in those states set up state exchanges to keep the subsidies flowing to their constituents. “A simple fix from either Congress or Republican governors would allow people to keep their benefits,” Levitt says.

As Brian Beutler has explained, the prospect of so many of each of these governors’ constituents losing insurance would theoretically put pressure on them to make things right. The same might be the case for GOP lawmakers in Congress. One possibility might be that the two parties use this as an occasion to enter into negotiations over the law’s future, in which Republicans try to leverage the need for the fix to get other changes to it they want — which could be dicey for the law but perhaps not too much of a threat to it.

Of course, these lawmakers would also face intense pressure from the right not to fix it. And for all I know, they might let the law’s subsidies disappear for millions.

But at that point, we would at least gain real clarity from these lawmakers as to their true intentions to the law and its beneficiaries.

Republicans — including some of those who were just elected to the Senate — have long engaged in a little dance that goes like this. They tell the GOP base that really, truly, they are committed to doing all they can to destroy Obamacare. But, they say, their hands are tied: The President will veto whatever they try to do. They are right about that. But the question is, do GOP lawmakers actually want to be in a position where they could successfully take the law’s benefits away from people?

When asked directly whether they would actually roll back the law’s benefits for their constituents, Republicans have tended to fudge endlessly. They fulminate against that monstrosity the base calls “Obamacare.” But they carefully leave the impression that they don’t really favor returning to a place where people would lose coverage or protections against insurance industry abuse — whether through invocations of some phantom “replace” plan or through straight up evasions on what they think should happen to those benefits. The status quo works for them: They can claim to be for repeal without owning the political consequences of that actually happening.

A SCOTUS decision nixing the subsidies would present these lawmakers with a straight choice: Either restore subsidies for millions, or let all these people’s coverage lapse. No more games.

“Repeal until now has been symbolic,” Levitt tells me. “If SCOTUS were to disallow the subsidies, the Republican decision in response would all of a sudden have serious consequences.”

And there are other reasons this might not be so easy. If SCOTUS does this, Levitt adds, “the insurance market would collapse in these states. Congress couldn’t possibly do nothing at that point. There would be tremendous pressure from the insurance industry, and the health care industry generally, to fix this.”

Now, it’s very possible Republican members of Congress — and GOP governors — would not fix it. But at least the true consequences of their health care stance would now be nakedly apparent.

And by the way, that could have interesting ramifications for 2016, suddenly thrusting the question of what to do about all of these millions of suddenly-uncovered people into the presidential race.

Yes it would. Taking away access to affordable health care from millions of Americans after having once given it to them is political suicide. It will energize and motivate voters who sat out the 2014 midterms.

One response to “U.S. Supreme Court grants review in King v. Halbig: ‘Five words’ threaten the Affordable Care Act

  1. Thanks for keeping us informed!