The Obama administration has prepared for Wednesday’s Supreme Court showdown by spending an extraordinary amount of time not just arguing the law, but the possible bad outcomes if the justices strike down Obamacare’s subsidies in most states.
By hammering away at the potential fallout, the administration and its allies are appealing to Chief Justice John G. Roberts Jr. and other conservative justices who’ve argued states deserve fair warning when Congress tinkers with the delicate boundary between federal and state authority in pursuit of its policy goals.
At issue are the subsidies the Affordable Care Act offers to millions of customers who buy insurance on Obamacare’s exchanges.
The law says subsidies can only be paid to customers of exchanges “established by the state” — but the administration decided that meant the federal HealthCare.gov exchange, which serves more than 30 states that didn’t set up their own exchanges, could offer subsidies too.
Obamacare opponents say that’s an affront to the plain language of the law, while the administration has been focused on arguing the devastating outcomes should the opponents prevail.
“First, millions of people would lose their health insurance subsides and therefore would no longer be able to afford health insurance,” Health and Human Services Secretary Sylvia Mathews Burwell said in a recent letter to Republican leaders. “Second, without tax subsidies healthy individuals would be far less likely to purchase health insurance, leaving a disproportionate number of sick individuals in the individual insurance market, which would raise the costs for everyone else. And, third, states that did not establish a state marketplace would return to a time when the recourse for those without insurance was to seek care in hospital emergency rooms, further driving up insurance costs for everyone.”
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The administration also argues that such an unthinkable outcome is proof that whatever the law says, Congress didn’t mean for only some exchanges to pay subsidies. Lawyers said if Congress had wanted to use the subsidies to entice states to set up exchanges on their own, independent of the government, they would have been a lot clearer.
“It makes little sense to conclude that Congress would have communicated these consequences in so oblique a manner if — as petitioners insist — its purpose was to ensure that every state got the message that it needed to establish its own exchange to avoid harms to its citizens and its insurance market,” Justice Department attorneys say in their main brief to the justices.
Abbe R. Gluck, a Yale law professor who is tracking the King case, said the conservative justices should be receptive to that argument under principles of federalism, since no one seemed to think Obamacare limited subsidies to state-run exchanges in the law’s infancy.
“The rules say that you need unmistakable clarity before you read a statute to work an intrusion on the states,” Ms. Gluck said. “The fact no one — including the states — had any notice of the way the challengers now would read the statute shows their reading is at odds with the text.”
She said Chief Justice Roberts, the Bush appointee who devastated conservatives by saving Obamacare three years ago, cited this principle in an opinion he wrote for the court last year.
If the federal government decides to “radically readjust” the balance of state and national authority, it must be “reasonably explicit” about it, the chief justice wrote in Bond v. United States, citing prior case law.
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Both sides agree that if the justices were to side with the challengers in the case, King v. Burwell, it could punch a hole in Obamacare’s economics, leave millions without the ability to pay for the coverage they’ve gotten over the last 18 months, and create a political headache for all involved.
More than 6 million Americans who rely on the subsidies would become uninsured, according to some estimates, and Mrs. Burwell has said she has no administrative fix for the “massive damage” that would result from an adverse ruling.
Conservatives like Kevin Broughton, a spokesman for the Tea Party Patriots, said the administration and its Democratic allies have no one to blame but themselves after muscling their overhaul through Congress in 2010.
“There has to be a presumption,” he said, “that the words in a statute mean what they say.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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