The court this month heard arguments in a case that the Obama administration says could gut the law. It will decide whether some 7 million low- and middle-income people in about three-dozen states will continue to receive subsidies under the law to help them buy health insurance.
If the justices conclude that health insurance subsidies were not authorized by the statute, most of those people would no longer be able to afford coverage. And health insurance exchanges in those states could fall apart. A ruling is expected by early summer.
Health and Human Services Secretary Sylvia Burwell said a decision in favor of the law’s challengers would be devastating. “We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision,” she wrote in a letter to Republican members of Congress.
The primary question in the case, King v. Burwell, is whether the ACA prohibits subsidies in places where the federal government, rather than a state, runs the exchange. A provision in the statute seems to say that subsidies are solely available to people residing where marketplaces have been “established by the state.”
The law’s defenders say other provisions, and its structure and intent, amount to irrefutable evidence that it called for subsidies nationwide.
Initial questioning by the justices revealed a sharply divided court. The four left-leaning members evinced strong backing for the administration’s position. But Chief Justice John Roberts Jr., who cast the decisive vote to save the law three years ago, was quiet on the opening day of arguments.
In potentially good news for the administration, however, Justice Anthony Kennedy, who voted with the dissenters in 2012, made a number of comments suggesting he was undecided this time around.
“Perhaps you will prevail in the plain words of the statute,” he said to an attorney for the plaintiffs. But, he added, “there’s a serious constitutional problem if we adopt your argument.”
Michael Carvin, who represented the challengers in that case, was back this month, again squaring off against the administration’s top lawyer, Solicitor General Donald Verrilli Jr.
“This is a straightforward case of statutory construction where the plain language of the statute dictates the result,” Carvin said. But he was bombarded with questions from the liberal justices that concentrated on the overall law.
“We don’t look at four words,” Justice Elena Kagan said. “We look at the whole text, the particular context, the more general context, try to make everything harmonious with everything else.”
Justice Stephen Breyer made a similar point, saying, “If you want to go into the context, at that point it seems to me your argument really is weaker.”
Justice Sonia Sotomayor said Carvin’s interpretation would lead to “the death spiral that this system was enacted to avoid.”
For his part, Kennedy asked if Congress had the constitutional authority to make states choose between setting up their own exchanges and allowing citizens to lose subsidies to help them get coverage. “Your argument raises a serious constitutional question,” he told Carvin.
Kagan made a similar point, saying that a properly drafted law would have made the choice more stark. “That’s not the clarity with which we require the government to speak when it’s upsetting federal-state relations like this,” she said.
Verrilli said the plaintiffs’ reading of the law “produces an incoherent statute that doesn’t work” and “revokes the promise of affordable care for millions of Americans.”
“That cannot be the statute that Congress intended,” he said.
Taking issue with the White House’s stance were Justices Antonin Scalia and Samuel Alito. Scalia said the law “means what it says” even if that has “disastrous consequences.”
“How can the federal government establish a state exchange?” he asked. “That is gobbledygook.”
He noted that Congress could quickly deal with a ruling rejecting the subsidies. “You really think Congress is just going to sit there while all of these disastrous consequences ensue?” he asked.
Verrilli said, “Theoretically they could.”
Alito said states also could act. “It’s not too late for a state to establish an exchange if we were to adopt petitioners’ interpretation of the statute,” he said. “So going forward, there would be no harm.” He added that the court could defer the date its decision goes into effect.
Verrilli said it was “completely unrealistic” for states to be able to move rapidly enough, even with additional time.
White House press secretary Josh Earnest commented that “it’s unwise to draw conclusions about the ruling based solely on the questioning of the justices.”
He said that can lead to “erroneous assumptions about the conclusion, and in some cases, some erroneous predictions about the likely outcome.”
Many observers saw the 2012 arguments as the death knell for the act.