Court Will Kick Obamacare to Congress
Conservatives in Washington are increasingly confident that the Supreme Court will rule this summer that the White House has gone beyond its legal authority in implementing the Affordable Care Act. Any such decision would enrage liberals. They would accuse the Republican-appointed justices of putting a stake through Obamacare to suit their partisan preferences.
They would be wrong. The legal case against the administration is strong, and ruling accordingly won't kill the health-care law.
Obamacare authorizes federal subsidies for health-care plans purchased on state insurance exchanges. In states that decline to establish those exchanges -- 34 of them have opted out -- the law says the federal government can run an exchange instead.
The hitch is that nowhere does the law authorize subsidies for plans purchased on those federally run exchanges. The Internal Revenue Service, which administers the subsidies, has acted as though it does. The court has to decide whether the IRS is acting legally.
Supporters of the IRS's policy say that the case -- King v. Burwell -- makes too much of a mere drafting error. They say that Congress can't have intended to withhold subsidies from most of the country. And they say it would be disruptive and cruel to take away people's tax credits now that they're counting on them.
Congress surely didn't want the subsidies to be geographically limited. Most members of Congress who voted for the law surely wanted it to be more popular and wanted states to set up exchanges. And the vast majority of them surely had no thoughts in particular about how to treat states that didn't go along. They're generally not detail-oriented people when it comes to policy.
But the law Congress passed tied subsidies to a state's behavior in a way that is not at all absurd in principle. The subsidies create an incentive for states to set up exchanges. Congress uses such incentives all the time, taking the risk that states will balk and laws will not achieve all of their ambitions. Much of Obamacare's coverage expansion comes from enlarging Medicaid. The method of the law was to offer extra money for states that went along, and not all of them have.
It's true that taking away the subsidies now would be disruptive, but the court can't let itself be swayed by that argument. Otherwise, it would be saying that the more people a lawless presidential action affects, the more untouchable it should be. Congress and state legislatures are the proper forums for resolving this problem. Both will be under enormous pressure to do so if the court rules against the IRS and people lose their subsidies. That's why a lot of the commentary about the case as a death knell for Obamacare is overstated.
Even one of the judges who ruled in favor of the administration in earlier stages of the case has noted the strength of the argument against it. Fourth Circuit Court of Appeals Judge Roger Gregory said that the administration had an "only slightly" stronger case than its critics, whose position had a "common-sense appeal."
A lot of conservatives think the Supreme Court whiffed the last time it considered Obamacare, in 2012, when it upheld the law’s constitutionality. This time might be different, though, because this isn't a constitutional case. In 2012, Chief Justice John Roberts argued that the court had an obligation to try to read the law in a way that made it consistent with the Constitution. That reading didn't have to be the most natural one so long as it was plausible. In this case, though, the Constitution is not at issue and is therefore not a reason to read the law one way or the other.
The fact that it isn't a constitutional case also makes it easier for other branches of the government to adjust their policies in reaction to a ruling. In 2012, the court was being asked to rule that the federal government had no power to mandate that individuals obtain health insurance and strike down the law entirely. If the court rules against the administration this time, it won't be saying that Congress can't offer subsidies in states without their own exchanges; it will just be saying that Congress did not, in fact, make that choice in writing the law. It might further ease the justices' minds that it's entirely possible that Congress and state governments will move to shore up Obamacare after its decision.
So the court may decide that the law simply says what it says. Ruling that way won't doom Obamacare. It will, however, reopen the law in Congress. This time, let's hope lawmakers pay more attention to the details.
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