The Supreme Court's sneaky scheme to destroy ObamaCare
With the help of some spurious legal reasoning, the court appears poised to dismantle the Affordable Care Act
The order issued by the Supreme Court last Friday consisted of one sentence. But this one sentence could threaten access to affordable health care for millions of Americans, in what appears to be a strategy by the high court to destroy President Obama's greatest domestic achievement in the most subversive way possible.
The court agreed to hear an appeal to a decision, King v. Burwell, handed down by the U.S. Court of Appeals for the Fourth Circuit. In its ruling, a unanimous three-judge panel held (correctly) that the Affordable Care Act made subsidies available on the exchanges established by both the state and federal governments. The somewhat surprising decision by the Supreme Court to hear the case suggests a very strong possibility that it will use legal reasoning that falls somewhere between "implausible" and "surreal" to blow a massive hole in the Affordable Care Act.
The same day that King was handed down, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled in Halbig v. Burwell that individuals purchasing health insurance on exchanges established by the federal government, rather than by state governments, would not be eligible for the subsidies designed to make insurance affordable. To date, more than two dozen states, most of them led by Republican governments, have declined to build exchanges, which means their residents are dependent on exchanges built by the feds. The ruling focused on some fuzzy wording in an isolated passage of the statute that can be read to suggest that subsidies would only be available on state exchanges.
This ruling was quite simply ludicrous, a raw political attack on the Affordable Care Act and nothing more. Basic canons of statutory interpretation require judges to read statutes as a whole and to refrain from assuming that legislators intend absurd results. The Halbig reading of the law, conversely, produces a result that is nonsensical on its face. Why would Congress go to the trouble to establish a federal backstop that it knew would collapse immediately? If legislators were trying to coerce the states to establish their own exchanges, using the threat of withholding subsidies, why would the consequences of a state failing to establish an exchange be kept a secret by all involved? It's also worth noting that if the meaning of the statute is even debatably ambiguous, well-settled precedent requires the courts to defer to the executive branch's interpretation of the statute.
It is, to put it mildly, hard to argue that the ACA purposely built its own self-destruct button when all the legislators involved believe that this interpretation is not merely wrong but absurd.
Halbig was, however, about to be consigned to the dustbin of history. The D.C. Circuit agreed to re-hear the case en banc — that is, with every judge hearing the case, not just three. Since there is now a majority of Democratic nominees on the court, and nobody who isn't a fanatical opponent of the ACA considers the Halbig arguments serious, the initial Halbig holding had no chance of surviving.
The legal challenge's radical libertarian architects recognized this, preemptively arguing that it would be a "political" move for the D.C. Circuit to hear the case en banc, even though the relevant rules say this is exactly the kind of case that is appropriate for a rehearing. The chutzpah would be comical if it weren't part of a grotesquely immoral crusade to deny access to affordable health care to millions of Americans.
This is why the Supreme Court's decision to step in is so disturbing. If there was still a circuit split, one couldn't really infer very much about the position of the justices. But the court preempting the en banc hearing of Halbig is another story. "There was no reason to take this case in order to uphold the ACA, given the nearly certain result of the en banc," Margo Schlanger of the University of Michigan Law School told me. "So that means there are four justices who want to strike it down who think they have five votes to do so."
This doesn't make it absolutely certain that the Supreme Court will reverse King and gut the ACA. As Schlanger notes, only four votes are necessary for the Supreme Court to take a case. The four justices who held that the entire ACA was unconstitutional in 2012 may simply be thinking that they have nothing to lose by trying to persuade Chief Justice John Roberts to come along this time. It's also possible that even if five justices are inclined to accept this silly challenge to the ACA, they might change their minds (as Roberts allegedly did in voting to mostly uphold the ACA the last time around).
Still, at this point the smart money is that the Supreme Court will vote to overturn King and throw most of the exchanges into chaos. The effect of this would be a tax hike that would make health insurance instantly unaffordable for millions of Americans.
Worse, this would likely create a death spiral that would see the collapse of the federally established exchanges. Some blue states would have their own exchanges, but many others would not. Worse still, the fact that the core benefits of the ACA — the historic Medicaid expansion and the regulated exchanges — would be largely confined to blue states would make it much easier for a unified Republican Congress and White House to repeal the ACA entirely.
It's very likely, in other words, that John Roberts is on a crusade to slowly poison the ACA to death without issuing a single high-profile ruling holding the ACA unconstitutional. First, he re-wrote the Medicaid expansion in a way that denies health insurance to millions of poor people (while not even meaningfully protecting state sovereignty). And now, Roberts might be ready to join the court's other Republicans to destroy most of the exchanges based on legal arguments that are even more dubious.
Don't be fooled. Such a ruling would not reflect any legal principles. Rather, it would reflect the Republican Party's longstanding offer to people who lack health insurance: nothing.