Oral arguments with new Obama Care challenge before the Supreme Court today
[Context]
From the L.A. Times
The court is slated to hear arguments Wednesday in King vs. Burwell, a lawsuit that claims federal insurance subsidies should be available only to people buying coverage on exchanges set up by their state governments - and not to people in the 34 states that let Washington set up their exchanges for them. If the lawsuit prevails, it could cause premiums to rise uncontrollably in those states while denying millions of Americans the coverage they badly need. It would also render the insurance reforms at the heart of Obamacare unsustainable in much of the country.
The court is slated to hear arguments Wednesday in King vs. Burwell, a lawsuit that claims federal insurance subsidies should be available only to people buying coverage on exchanges set up by their state governments - and not to people in the 34 states that let Washington set up their exchanges for them. If the lawsuit prevails, it could cause premiums to rise uncontrollably in those states while denying millions of Americans the coverage they badly need. It would also render the insurance reforms at the heart of Obamacare unsustainable in much of the country.
There are numerous reasons why the court should reject the plaintiffs' phony narrative about the new exchanges that Congress required in every state. One of the best, though, is that a ruling in the plaintiffs' favor would retroactively penalize states and their residents for choosing to let Washington run their exchanges when the consequences couldn't have been foreseen.
The handful of plaintiffs in King and a similar lawsuit, Halbig vs. Burwell, say they don't want to buy health insurance and would qualify for a hardship exemption if there were no subsidies to make the coverage affordable. They're joined by a few businesses that would face penalties under the law only if their workers obtained subsidized coverage. Although one provision of the law says that anyone who meets the income limits is eligible for subsidies, another says the size of the subsidies will be based on the cost of insurance purchased at an exchange “established by the State.” From that thin tissue the plaintiffs spun out a fanciful story about lawmakers trying to coerce states into building their own exchanges by threatening to withhold subsidies from low- and moderate-income residents.
If Congress was making such a threat, that's news to the lawmakers who wrote the act, who told the court that they intended subsidies to be available through every exchange. State officials were in the dark too, which would violate a Supreme Court precedent that requires Congress to give states clear notice when it attaches strings to the money it offers, officials from 22 states have argued. Had the public known that the insurance subsidies wouldn't be available if their states didn't set up an exchange, the debates in state capitals over whether to do so would have been far more consequential - and presumably, much harder fought.
The plaintiffs in King have the right to put their own interests ahead of the roughly 9.3 million people who now have subsidized health coverage in the 34 states that did not set up their own exchanges. But they don't have the right to contort the law's meaning so that one phrase taken out of context undermines the rest of its provisions, or to rewrite the history of its enactment to support their ridiculous claims.
Justice Ginsberg questioned the standing of the plaintiffs to bring the case (apparently 3 of them can not be located and are just names picked at random to get the challenge in court. The libertarian Competitive Enterprise Institute, a think tank funded by big pharmaceutical firms, oil and gas outfits, the Koch brothers, Google, tobacco companies, and conservative foundations, answered the call. ("This bastard has to be killed as a matter of political hygiene," Michael Greve, then CEI chairman, said at the conference.) But CEI had to recruit plaintiffs-actual people who could claim they had been harmed by the Affordable Care Act in a particular way-to launch its lawsuit.
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Justice Kennedy seemed to have serious issues with the challenge.
n the midst of a discussion of context and the consequences of petitioners’ reading, Justice Kennedy raised a question that will surely receive a lot of scrutiny in the coming discussion of the case. He pointed out that, under petitioners’ reading, the federal government would be all but forcing states to create their own exchanges. That’s true not just for the headline reason covered by this case - that their citizens would be denied benefits - but for a very perceptive reason that Justice Kennedy added: namely, state insurance systems will fail if the subsidy/mandate system created by the statute does not operate in that particular state. For Kennedy, that seemed to make this case an echo of the last healthcare decision, where the Court concluded that it was unconstitutional coercion for the federal government to condition all Medicaid benefits in the state on expanding Medicaid therein. Simply put, Kennedy expressed deep concern with the federalism consequences of a reading that would coerce the states into setting up their own exchanges to avoid destroying a workable system of insurance in the state. Justice Scalia attempted to respond on petitioners’ behalf that such concerns do not enter if the statute is unambiguous, but Justice Kennedy reiterated his concern with adopting a reading that would create such a “serious unconstitutional problem.”
Perceptive hypothetical from Justice Kagan forces petitioners to focus on context, not just text.
Petitioners in King focus very heavily on the text, which they say only provides subsidies to states that set up their own exchanges under the literal terms. After Justice Ginsburg asked about standing, Justice Breyer opened the merits questioning whether that’s even true based on the way the statute defines exchanges (namely, as state-created entities) and then directs the federal government to establish “such an exchange” when the state fails to do so. But much of the early questioning was dominated by a real-life hypothetical from Justice Kagan, suggesting that petitioner’s reading does not accord with everyday usage.
She offered (something like) the following example: Imagine I tell law clerk A to write a memo, and law clerk B to edit law clerk A’s memo, and then I tell law clerk C to write such memo if law clerk A is too busy. And imagine that happens - law clerk A is too busy, so law clerk C writes it. Should law clerk B edit it? The answer seemed obvious: of course, and Justice Kagan all but told petitioner’s counsel (and her clerks) that they would be fired if they didn’t do their job under those circumstances. In response, petitioner’s counsel said that the context mattered, and it would depend on whether the Justice was indifferent between law clerk A and law clerk C writing the memo in the first instance. But that seemed to play into Justice Kagan’s hand, who made clear that this was her point - that in understanding this text, the context obviously mattered.
That turn to context seemed unprofitable initially for petitioners. Many Justices, including Justice Breyer, Justice Sotomayor, and Justice Kennedy expressed skepticism that the statute would function as intended, in a reasonable fashion, and even constitutionally if petitioners’ reading were accepted.
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