Analysis Law and Policy

The Fate of the Affordable Care Act Rests in John Roberts’ Hands—Again

Jessica Mason Pieklo

Challengers get their second shot Wednesday to try and gut Obama's historic health-care reform law. Will the chief justice stand in their way again?

The U.S. Supreme Court will hear arguments Wednesday in King v. Burwell, the latest attempt to gut the Affordable Care Act. The arguments in King have been a long time coming. Almost before the ink had dried in Chief Justice John Roberts’ majority opinion on Republicans’ first swipe at the ACA, NFIB v. Sebelius, conservatives had begun concocting their next challenge. In 2012, conservative legal scholar Jonathan Adler and political analyst Michael Cannon, of the libertarian think tank the Cato Institute, published a paper arguing that four words, read in isolation from the hundreds of thousands of other provisions in the ACA, prove that Congress intended to punish low- and middle-income Americans in states run by Republicans ideologically opposed to the law. King v. Burwell has taken Adler and Cannon’s hypothesis and turned it into a full-fledged political and legal campaign to undermine the Obama administration’s historic health-care reform law.

At issue in King is one of the cornerstones of the Affordable Care Act: premium tax credits, otherwise known as subsidies, available to low- and middle-income individuals to help offset the cost of their health insurance premium. The challengers in King mimic Adler and Cannon’s arguments, claiming that the ACA allows only states, and not the federal government, to offer subsidies for health insurance purchases. For proof, they claim Congress dictated that the subsidy structure would apply only to exchanges “established by the State.” They argue that this phrase limits the availability of tax benefits solely to state-run exchanges. So far, 14 states have established their own health insurance exchanges, while 36 states run by conservatives ideologically opposed to the health-care law have refused.

This approach, the ACA challengers argue, was designed to work like Medicaid does, by motivating states to buy into the health-care law and establish their own exchanges. The plaintiffs claim Congress set up a simple carrot-and-stick approach with these four words: support the new health-care law and set up a state exchange, or we’ll punish your residents by holding back their tax credits.

Not so, argues the Obama administration. In its brief defending the federal subsidies under the ACA, the administration explains how the only way the challengers win is if the Court ignores the entire rest of the statute. Rather than cut off those 36 states that have failed to establish their own exchanges, which would leave residents either without insurance coverage or stuck with coverage they cannot afford, the ACA mandates that the federal government step in with its own exchange for purchasing insurance. It’s nonsensical, the administration points out, to claim that Congress built a law designed to insure as many people as possible only to restrict subsidies based on where an individual happens to live. Furthermore, the statute defines who qualifies for a tax credit based on income level, not their state residency. If Congress intended to limit the availability of insurance subsidies based on whether a state established its own exchange, the administration maintains, surely the text would reflect that limitation throughout.

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But it doesn’t.

As of now, there is no disagreement among the federal appeals courts as to whether the Obama administration can offer the subsidies. The plaintiffs in King and the handful of other copycat lawsuits peppering federal courts across the country argue that the IRS, the administrative agency in charge of dealing with the tax credits under the ACA, abused its discretion when it issued the rule allowing subsidies in the federal exchanges, because that rule is not supported by the statutory language of the ACA. A unanimous panel of judges on the Fourth Circuit Court of Appeals in King ruled in favor of the administration, while a divided panel of judges from the D.C. Circuit Court of Appeals ruled that the subsidies were invalid. But that decision was vacated after the entire panel of judges agreed to hear the case. And I haven’t even touched on the various procedural hurdles that should kick the plaintiffs in King right out of federal court. Those obstacles, as Adam Liptak points out in this piece for the New York Times, are reasons enough for progressives to take a breath and relax about the fate of the law—even though a loss for the administration would threaten to take away insurance coverage from millions of low- and middle-income individuals by making their coverage unaffordable.

So the Obama administration should have the legal advantage going into Wednesday’s arguments. But, as we learned in last summer’s ACA loss in Hobby Lobby, having the legal advantage before the Roberts Court is only half the battle. The real question is whether the Obama administration has the political advantage going into Wednesday’s argument. And I think they might.

Progressives don’t often look to Chief Justice Roberts to champion their causes, but this time maybe they should. During his time as chief justice, Roberts has proven himself to be both a tremendously skilled litigator and a savvy politician, which is why it is reasonable to see him ruling for the administration in this case. Of the myriad legal challenges to the Affordable Care Act so far, including to the individual mandate and the birth control benefit, King is the most obviously formulated, partisan attack because it essentially cribs from the Cato Institute’s arguments. This may make it a perfect fit for Justice Antonin Scalia, but not so much for Roberts, who must manage the Court’s already shaky reputation for partisanship.

Furthermore, the reality is the business community, despite what Republicans argue, largely supports the ACA. A ruling against the administration threatens to throw the insurance market into chaos, which is ultimately bad for business. And it’s difficult to imagine the Roberts Court issuing a decision that would be bad for business.

Of course, there is always the risk that the partisan temptation will be too great, and the conservative majority will do to the ACA what it did to the Voting Rights Act in Shelby County v. Holder, sending it back to Congress to “fix.” Like we’ve seen in the fight for voting rights, that’s a decision that would be disastrous on numerous fronts. Not only would millions of Americans find themselves without assistance paying for health insurance—they’d be left looking to Republicans in Congress for an answer during a presidential election year. And true to form, Republicans admit they have no plan to help those people, which means a Congressional “fix” is a euphemism for sending the ACA away to wither and die. That possibility has got to be a tempting grab for Roberts, who reportedly switched his vote to support the administration during the first health-care challenge after initially siding with conservatives to strike the individual mandate.

This disaster scenario would most heavily affect women of color. In places like Texas, which are already in the midst of a human rights crisis thanks to Republicans playing politics with health care, a decision gutting the ACA subsidies would affect more than a million women, 60 percent of them Latina. Just as it is difficult to imagine the Roberts Court issuing a ruling that would be bad for business, it is almost as difficult to imagine the Roberts Court issuing a decision that is good for women of color.

We likely won’t know until June if Adler and Cannon’s rogue legal theory cooked up in libertarian laboratories is a success. But do we know that no matter the outcome, King v. Burwell is not the end of conservatives’ pushback against the Affordable Care Act. Right now more than 40 legal challenges to the ACA’s accommodation to the birth control benefit post-Hobby Lobby are working their way through the federal courts, as well as challenges to both the employer mandate portion of the law and the administration’s delays in implementing it. In each and every one of these challenges, women—specifically women of color—stand to lose the most should conservatives succeed in rolling back the ACA. That’s a point often overlooked by pundits parsing the costs of the King v. Burwell litigation, but I doubt it’s one overlooked by Republicans enabling these lawsuits.

Right now the only thing standing between Republicans and their efforts to strip millions of individuals of affordable health insurance is Chief Justice Roberts and his concern for the reputation of the Supreme Court. In the balance of harms at issue in King v. Burwell, we’ve got the fate of millions of individuals and their families versus the institutional integrity of the Court. At best, I consider the probable outcome of this case to be a toss-up.

Let’s let that sink in a bit.     

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