All the hand-wringing over incipient chaos in American health care can now cease (at least until the next election), thanks to the Supreme Court’s 6-3 ruling today in King v. Burwell. Chief Justice John Roberts, who wrote the majority opinion, and Justice Anthony Kennedy joined the four-justice liberal wing in rejecting the claim that the text of the Affordable Care Act (ACA) limited health insurance subsidies to individuals living in states with their own health exchanges. As a result, the approximately 6.4 million people who receive their subsidies through participation in the federal exchange will not be at risk of having their insurance yanked out from under them.
Some highlights from the majority opinion (thoughts about the dissent to come in a later post):
* Not only did defenders of the ACA get the policy outcome they sought, they got the legal justification on their preferred terms as well. That is, Roberts, while critical of the “inartful drafting” appearing in several parts of the ACA, insisted on understanding the crucial phrase “established by the State” within the broader context of the statute, and in particular the purposes Congress sought to achieve through the law. The potent quotable: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”
* What makes the Roberts opinion particularly satisfying is its use of the dissenters’ own words to undermine the petitioners’ position. Petitioners claimed that Congress had deliberately sought to limit subsidies to states with their own exchanges, as a way of strong-arming recalcitrant states into participating. Without the subsidies, however, insurance would cease to be affordable for many recipients, and the resulting adverse selection would produce a “death spiral” damaging the health insurance markets at large and leaving millions of Americans without coverage. The idea that Congress would build this complicated regulatory machine and then include a prominent self-destruct button that could sabotage it seems laughable, but the fact that litigation hinging on this claim had made it to the Supreme Court at all meant that it had to be addressed. Roberts disposes of it by quoting Justice Antonin Scalia’s dissent from the first ACA litigation: “Without the federal subsidies . . . the exchanges would not operate as Congress intended and may not operate at all.” Scalia’s words came in the context of trying to explain why the entire ACA had to fall if any part were to be found unconstitutional, but while he might regret their use in the King majority opinion, even the most powerful jurists in the country don’t get to call backsies.
As for how the statute’s text should be interpreted, Roberts quotes a 2014 opinion from Scalia to argue against the kind of rigid literalism that Scalia has insisted is not how true textualists should go about interpreting statutes. Rather than take four words, in a 900-page statute, out of context, the justices, in Roberts’ words, “must do our best, bearing in mind the fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”
* The majority declined to pursue an alternative approach rooted in the principle, enunciated in the 1984 Chevron v. NRDC decision and used by the Fourth Circuit in King, that when statutory text is ambiguous, courts should defer to the interpretive judgment of the agency responsible for administering the statute, unless the agency’s construction is unreasonable. For some ACA supporters, the Chevron claim offered an escape hatch, in that the act’s defenders wouldn’t have to argue that the Internal Revenue Service’s construction of the statute was the only correct one; they would simply have to show that it was a permissible one. This option was decidedly Plan B for ACA supporters, however, as it would have left the subsidies vulnerable to a Republican administration’s reinterpretation of the statutory provision. The majority took the question off the table by claiming primary responsibility for determining the contested phrase’s meaning, in light of the unlikelihood that Congress would have delegated to the IRS the authority to make policy judgments–especially concerning something as central as eligibility for health insurance subsidies–outside the agency’s competency.
* Another road not taken involved a federalism claim that had appeared in the Court’s earlier invalidation of the ACA’s Medicaid expansion. Giving states the choice between expanding Medicaid and forfeiting all federal Medicaid funding, said the Court in 2012, wasn’t really a choice at all. Rather, it unconstitutionally coerced the states into adopting the federal government’s preferred policy. A parallel federalism-based argument emerged from Justice Anthony Kennedy during oral argument in King, this time centered around giving states a choice between creating health exchanges and cratering their health insurance market. Like the Chevron deference argument, the federalism-based justification came with some unpleasant side effects for liberals, namely a protection of state prerogatives that could be extended to hamstring future federal regulatory efforts. In the end, though, Kennedy’s earlier musings about federalism did not find their way into the majority opinion.
King v. Burwell‘s ultimate impact, aside from the blow to Roberts’ standing among conservatives, will be more political than legal. After all, no new legal ground was broken, no soaring principle reaffirmed. What we have here is a run-of-the-mill case of statutory interpretation that is noteworthy only because the policy and political stakes were so high. The last Supreme Court ruling to feature such a high ratio of political significance to legal significance, Bush v. Gore, played a central role in the selection of a president. Will King v. Burwell help to select the next president? Stay tuned….