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WASHINGTON -- A lawsuit challenging the Affordable Care Act, once seen as a long shot, received a serious hearing at the Supreme Court Wednesday, as lawyers from both sides faced tough questioning from justices, making it difficult to predict how the court will rule and whether millions of people will have to relinquish their health insurance.
The interplay between the justices and the attorneys representing the plaintiffs and President Barack Obama's administration mainly aligned with partisanship expectations, with one significant exception. Justice Anthony Kennedy, a Republican appointee viewed as a potential swing vote in the case, appeared sympathetic to arguments from U.S. Solicitor General Anthony Verrelli that the plaintiffs' reading of the Affordable Care Act would cause inappropriate federal coercion of state governments.
Over the course of more than an hour in front of a packed courtroom, the nine justices heard oral arguments in King v. Burwell, one of the most highly anticipated and potentially consequential cases of this term.
The King case does not seek a ruling on major constitutional matters, as previous lawsuits against Obamacare did. Instead, it asks the justices to determine what the text of the Affordable Care Act means and, in particular, whether a few key words, “established by the State,” condition the availability of Obamacare’s generous tax credits on the actions of state officials.
One of the Obama administration's legal tactics in this case has been to argue the plaintiff's reading is unconstitutionally coercive to states, in part because the language in question is buried in the state and because the federal government never communicated to states their residents would lack access to subsidies if officials decided not to create a state-run exchange.
In an exchange with Michael Carvin, attorney for the plaintiffs, Kennedy suggested his clients' interpretation of the Affordable Care Act is problematic. "There's some serious constitutional problems if we adopt your argument," Kennedy said.
The Affordable Care Act calls for the creation of exchanges through which people can buy health insurance. States have the option to operate them. If a state chooses not to, then under the law the U.S. Department of Health and Human Services takes on that task. Just 13 states and the District of Columbia currently fully run their own health insurance exchanges.
The controversy in King v. Burwell focuses on the exchanges run by the federal government through HealthCare.gov: Can people buying coverage there receive Obamacare's tax credit subsidies for low- and moderate-income households? The plaintiffs in King say no. The government says yes.
The stakes in this case are enormous -- and, in some ways, unprecedented. If a majority of the justices are persuaded to support the King lawsuit, millions of Americans, across more than 30 states, would lose the financial assistance that allows them to buy insurance -- and, in the process, most would likely lose health insurance altogether. The exodus of paying customers would rattle insurers, throwing state insurance markets into disarray.
According to the Rand Corp., as many as 9.6 million people could lose their health insurance if the disputed subsidies were invalidated. An Urban Institute analysis concluded that these individuals are predominately working, white and Southern. The states that defaulted to federally run health insurance exchanges tend to be governed by Republicans.
Never before in American history has the federal government taken public benefits away from such a large number of people. And while polls indicate the public would want Congress or the states to restore these subsidies, that seems a long shot at best.
Any effort to address the consequences of a high court ruling against the subsidies would run into staunch opposition from Republicans who still want to repeal the entire law, disagreements within the GOP about how to respond, and Obama's reluctance to cast aside more elements of his health care program in order to strike a deal. And state leaders have been unwilling or unprepared to take steps to create new exchanges in the face of the lawsuit, even though that would shield their residents.
Debate over the lawsuit’s merits has been playing out in academia, the media and the lower courts for more than two years, propelled by a well-financed, well-coordinated effort from conservative and libertarian organizations. On Wednesday, Michael Carvin, the lawyer representing the King plaintiffs, hit familiar themes …
HIS ARGUMENTS HERE – JUSTICE REACTION
Solicitor General Donald Verrilli made the government’s case, just as he did three years ago, when the Supreme Court took up the individual mandate under Obamacare. He focused his arguments on
HIS ARGUMENTS HERE – JUSTICE REACTION
OTHER ISSUES THAT DID OR DIDN’T COME UP, LIKE STANDING
Using oral arguments to predict a Supreme Court decision is always difficult. Three years ago, four of the five conservative justices grilled Verrilli. (The fifth, Justice Clarence Thomas, maintained his custom of saying nothing, as he did again on Wednesday.) But the government prevailed, albeit after Chief Justice Roberts reportedly changed his vote.
REACTION OF EXPERTS WHO HEARD CASE HERE
The Supreme Court is expected to issue its ruling on King v. Burwell in June.
