Latest GOP challenge to Obamacare reaches Supreme Court

WASHINGTON – The Affordable Care Act has made a huge difference for millions of working Americans. In particular, the law’s federal tax credits have made health insurance affordable for over 9 million people who otherwise couldn’t afford it.

Nevertheless, from the start the ACA’s opponents have tried to destroy the law. They brought a constitutional challenge. That failed. The Republican-controlled House of Representatives voted 50 times to repeal it. That’s failed too, at least so far.

Now opponents think they’ve found a new way to eviscerate the ACA. On March 4, the U.S. Supreme Court heard their latest challenge, King vs. Burwell-a challenge organized by the Competitive Enterprise Institute, a group funded partly by the Koch brothers. Both the AFL-CIO and the NEA filed amicus (friend-of-the-court) briefs to defend the law.

In enacting the ACA, Congress anticipated that, to make health-care affordable, each state would set up its own government-run insurance marketplace-what the law calls an American Health Benefits Exchange. For states that failed to cooperate, Congress authorized the U.S. Department of Health and Human Services to set up a federal exchange. But HHS eventually had to set up exchanges in 34 states, nearly all under Republican control. In these states, the federal government runs the exchanges that enable millions of working Americans to afford health insurance.

So in their latest challenge to the ACA, opponents seized on two words in this 422,000-word law. In a subsection giving the formula for calculating an insured person’s tax credit, the ACA refers to exchanges established by “the State.”

Europeans would have no trouble understanding that “the State” means any branch of government. Everyone understands the phrase “separation of church and state” to refer to any government, however local or national. Likewise, the Internal Revenue Service recognized, by rule, the ACA authorizes tax credits to everyone who buys insurance on an exchange, whether run by a state or by HHS.

But the King vs. Burwell plaintiffs-four Virginians-want the Supreme Court to interpret “the State” as if it read “a state and not HHS.” In essence, they claim Congress intended to make health insurance affordable only in those 16 states, and the District of Columbia, that set up their own exchanges, not in the 34 states with federally run exchanges.

If the court majority rules for the four plaintiffs, over 9 million working Americans could lose access to affordable health insurance. This group will tilt younger and poorer-and healthier. A ruling causing them to drop health insurance will increase everyone else’s premiums by up to 47 percent, according to the Rand Corporation. Sharp premium increases will drive still more Americans out of the health-insurance market, leading to ever higher premiums

in a health-care death spiral.

The deans of 19 public-health schools warn that the resulting lack of insurance will cause the deaths of nearly 10,000 Americans each year.

Attorney Michael Carvin, arguing against the tax credit, immediately ran into questions from Justice Ruth Bader Ginsburg about an issue neither side discussed in their briefs: That the Constitution limits federal courts to cases brought by someone the decision will materially affect.

Because the four Virginian plaintiffs may have access to Medicare or veterans’ benefits, or otherwise have an exemption from the ACA’s insurance mandate, a decision about ACA tax credits might affect none of them. To decide this issue, the court could send the case back down to lower courts for hearings.

But if the court decides the Burwell case on its merits, Justice Stephen Breyer highlighted a problem with the Virginian plaintiffs’ argument: Though the ACA specifically defines “exchange” to mean a government agency “established by a State,” it also specifically authorizes a federal agency, HHS, to set up an “exchange.”

And Justice Elena Kagan-joining with Justice Breyer and Justice Sonia Sotomayor-noted that, under another ACA provision, only residents of “the state that estab­lished the exchange” may buy insurance on it. If exchanges established by “the State” don’t include HHS exchanges, no one would have the right ever to buy insurance on any HHS exchange.

Congress would not have authorized HHS to set up insurance exchanges on which no one would ever qualify to buy insurance. Had Congress intended such a remarkable result, Justice Ginsburg added, it would not have buried the operative language in a technical provision determining the amount of a tax credit.

Finally, Justice Samuel Alito, and especially Justice Anthony Kennedy were concerned over how a ruling for the four plaintiffs would affect states’ rights. If a state’s citizens can only get tax credits for buying insurance on an exchange set up by that state, and not by HHS, that might “coerce” the state into establishing exchanges, in violation of the U.S. Constitution’s 10th Amendment. To avoid what Justice Kennedy called a “serious constitutional problem,” he and Justice Sotomayor suggested the court interpret the ACA to uphold HHS tax credits.

When Solicitor General Donald Verrilli rose to defend HHS tax credits, he ran into a barrage of questions from Justice Alito and Justice Antonin Scalia.

Asked Justice Alito: If Congress meant an HHS exchange to qualify as one set up by “the State,” why doesn’t the ACA say that? The ACA does expressly provide the District of Columbia and the territories “shall be treated as a State.” No similar provision covers the federal government.

As to the argument the court should read the ACA to avoid absurd results, Justice Scalia declared some laws “make no sense.” “Disastrous consequences” don’t preclude a statutory interpretation.

Anyway, Justice Scalia predicted, if a ruling for plaintiffs would have results so dire, “this Congress would act.” The suggestion sparked laughter in the courtroom.

A ruling is expected in late June.

Photo Demonstrators with the Service Employees International Union, hold signs depicting numbers of people who have lost heath care coverage during a rally outside the Supreme Court in Washington, March 4, as the court was hearing arguments in King v. Burwell. Andrew Harnik/AP

 


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