I was in the courtroom at the Supreme Court for today’s landmark litigation in King v. Burwell, in which the Court will decide whether the Affordable Care Act’s provision of subsidies on exchanges “established by the State” can be read to mean subsidies are available on exchanges regardless of who established them. After arguments we have only slightly more insight into the justices’ views than beforehand, and it seems like the case will still be a 5-4 nailbiter handed down on the last day of term.
Mike Carvin, a frequent Supreme Court litigator who also was part of the team challenging Obamacare on commerce clause grounds in 2012, argued for the petitioners that subsidies are limited to state-established exchanges. He has a confident and aggressive style, which today played out with lots of interruptions from the justices and frequent competitions for the floor to attempt to finish his points. The Solicitor General, Donald Verrilli, argued on behalf of the federal government defending the IRS’ broader interpretation of the statute. While Verrilli was faulted for a weak performance in the 2012 Obamacare case of NFIB v. Sebelius, today he came off as calm, collected, and authoritative.
The opening salvos in today’s argument came from Justice Ginsburg, who interrupted Carvin before he even had a chance to finish his first sentence. She went into detail asking about the standing arguments that had been raised in the media, particularly as part of the Chief Justice lobbying effort, as he is seen as a major defender of constitutional standing requirements. From the Chief’s comments later in the arguments, however, it became clear that he wasn’t biting, and no other justice seemed inclined to follow Ginsburg’s lead. So one of the few clear takeaways from today’s argument is that the case will likely be decided on the merits. It’s encouraging to see that the Chief wasn’t moved by the inappropriate lobbying in the press.
Besides his comments on standing, the Chief held his cards close to his vest, and didn’t give a lot of indication of his leanings. The only hint came from his note that, if the case were decided under the Chevron doctrine, that would leave another administration open to altering the IRS’ current interpretation of the law. It’s possible he views that as softening the blow of a ruling for the government, but the response by the Solicitor General – that a change would be so monumental it’s hard to imagine a future administration being able to make it – makes that seem like cold comfort indeed.
Interestingly, one of the major other themes brought up in both amicus briefs and hammered in the media – the parade-of-horribles alleged to be in store if the Court rules for the petitioners – didn’t seem to get a lot of traction from the justices either. The consequences were discussed, but mostly in an effort to suggest that Congress couldn’t possibly have intended such a dramatic result. The magnitude of the consequences cut both ways, however. On one side, the government argued that no legislator could have intended to have so much riding on the states’ choices about setting up an exchange. On the other, the high stakes are something that Justice Scalia pointed to as a political guarantee that Congress would have to step in to ensure subsidies continue at least long enough to allow replacement legislation. Justice Kennedy also noted that the billions of federal dollars on the line suggests this isn’t the type of thing typically entrusted to an agency rather than Congress.
The major issue in the case, that of how general principles of statutory interpretation should apply to the law, seemed to be one on which Kennedy at least sided with the conservatives on the Court. For example, when the Solicitor General attempted to argue that the words “under section 1311” transformed the phrase “established by State” into “established by the federal government,” Kennedy warned him off, saying that those words hurt the government’s case more than they helped it.
The biggest question remaining in the case is how federalism concerns will play out. Attempts by the Left to deploy such arguments were famously successful at least with Justice Kennedy in the same-sex marriage case of United States v. Windsor, and so they’re coming up again. But, despite misleading claims by the newly minted “federalists” on the government’s side, there is more than one way to look at the question. As Justice Kennedy himself noted today, the government’s interpretation of the statute essentially blocks states from the option of steering clear of involvement with the ACA altogether, hardly an outcome that respects the traditional primacy of state law in the health care arena.
The federalist perspective that may tempt Kennedy to rework what he seems to acknowledge is its plain meaning is that of coercion. He several times mentioned the “very powerful” and “serious constitutional problem” that could arise from the magnitude of the federal government’s pressure on states to set up exchanges. If billions of dollars are on the line with the choice of whether to establish an exchange, how could that not be considered coercive on states? This issue isn’t one that the government is pushing – after all, they can hardly cast constitutional doubt on a statute they want to defend, plus they are inclined not to advance theories that would limit federal power. But it was raised by amici in support of the government. However, as Carvin pointed out, a tradeoff of billions of dollars in subsidies in exchange for involvement in a new federal program is hardly novel. Not only is it something the Court approved in NFIB v. Sebelius in 2012, it is regularly used in other contexts, from No Child Left Behind to the Clean Air Act.
At the end of the day, the thorny question of how best to address the fact that Obamacare is neither well-drafted nor well-accepted by the American people is not one for the Court or the IRS to address. It is for Congress. And, as Justice Scalia noted, Congress has ample incentive to step in to create both a temporary fix for those who were incorrectly advised they were eligible for subsidies as well as to replace the law with a more workable alternative.
The transcript of the arguments is now available for those who want to read the tea leaves word-for-word.