Supreme Court Prepares for Arguments in Affordable Care Act Case

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Summary: The Supreme Court will hear arguments this week as to whether national insurance subsidies should be struck down.

According to the Wall Street Journal, the Supreme Court is gearing up for another case on the Affordable Care Act. King v. Burwell is scheduled to begin on Wednesday of this week.

  

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Those who would prefer to see the health-care law overturned have an uphill battle, however. Though they want to persuade the Supreme Court justices to strike down national insurance subsidies, the move would contradict the high court’s decision from three years ago.

In 2012, the majority ruled 7-2 to uphold the Affordable Care Act, including deciding that Congress could not put unnecessary financial pressure on the individual states to adopt part of the law that expanded Medicaid, which is the federal-state health insurance program for lower income individuals and families. According to Wikipedia, states that declined to expand Medicaid before the end of 2014 are still allowed to opt in at any time. Conservatives who wanted to do away with the health care law were at least pleased with this ruling.

However, in the present case, if those challenging the law win, the states that chose not to set up their own health-insurance exchanges may have to choose between creating an exchange or else lose billions of dollars in subsidies that make health insurance more affordable for state residents.

Last year, the Supreme Court heard arguments on birth control provisions in the Affordable Care Act.

Those that support changing the healthcare law, as well as some academics, think that the ruling from three years ago will weaken the case against insurance subsidies. According to this group, pressuring the states to create their own insurance exchanges would be similar to the pressure the states faced regarding Medicaid.

Abbe Gluck, a law professor at Yale, said “I can’t imagine the justices aren’t aware of the possibility they’d be creating.”

Chief Justice John Roberts wrote in the court’s opinion in 2012, “It is a gun to the head.” The chief justice disapproved of the threat to take Medicaid funding from states that did not agree to expand the insurance. The funding made up more than 10% of some state budgets, essentially making it impossible for some states to say no. Because of these reasons, the court ruled that the threat could not be enforced.

The challengers in this case are four Virginia residents that were recruited by Competitive Enterprise Institute, a conservative organization. According to the Washington Post, these individuals do not want to buy health insurance, which is required under the law. Their position is that the Obama administration cannot offer national tax credits to subsidize health insurance for low- and middle-class residents. They argue that the law’s wording states that subsidies are available only in those states that run their own insurance exchanges. Their analysis is that Congress anticipated the subsidies as leverage to make the states create their own online insurance marketplaces.

The Justice Department has defended the law, arguing that Congress did not intend to use these funds as a weapon against the states. They explained that lawmakers wanted subsidies available everywhere, regardless of whether a state exchange was created.

Some felt that the law could be overruled by a strict reading of its text.

Over 30 states decided not to establish exchanges, meaning that subsidies for over 6 million Americans may be at risk.

Michael Carvin is the attorney for the challengers. He said that tax credits do not create the same level of coercion that the Medicaid plan did. According to Carvin, the Medicaid provisions would have mandated that states expand eligibility or completely lose a program. In contrast, tax credits encourage states to take on new functions.

In addition, declining an insurance exchange would cause less harm than losing the Medicaid program altogether. “You’re not putting on the table old federal [funding] guarantees, and the fiscal enormity is much less,” he commented.

As expected, conservatives disagree. Michael McConnell, a Stanford University law professor who formerly served as a federal appeals judge, said, “I don’t think that makes any sense.” He said that whether a program is new or old is “completely irrelevant as to whether there’s pressure being brought on the exercise of a constitutional right.” He said that denying tax credits is like eliminating Medicaid: “The consequences for people of the states are very high.” McConnell was appointed to the federal bench by former President George W. Bush.

An additional 22 states, led by Virginia, mirrored this view. They said it would be a “novel kind of pressure” if Congress were “to injure a state’s citizens and to destroy its insurance markets in order to force state-government officials to implement a federal program.” They argued they did not receive notice that they would miss out on insurance subsidies if they did not design state-run exchanges.

The Supreme Court has announced that it will begin using an electronic filing system.

Most parties included on the state brief are Democratic attorneys general. However, North Dakota Attorney General Wayne Stenehjem, a Republican, also signed it. North Dakota joined the lawsuit that challenged the healthcare law in the previous Supreme Court case.

In addition, seven conservative states, headed by Oklahoma, filed briefs in support of the challengers. They state that Congress has routinely used financial incentives to implement federal programs, and that states have the choice as to whether they will take the deal or not. According to this group, “There is nothing absurd—nor even unusual—about that result.”

These states have argued that there were convincing reasons for them to choose against receiving the subsidies, since the subsidy payments triggered significant health-insurance obligations on state employers.

Source: Wall Street Journal

Photo credit: shusterman.com, Wall Street Journal (Carvin)