Bad News for Obamacare – and America

Or so I think.

On Friday, November 7, the U.S. Supreme Court agreed to hear (granted the petitioner’s writ of certiorari) in King v. Burwell. In King, a panel of the Fourth Circuit unanimously rejected the argument that the federal government cannot, under the Affordable Care Act, subsidize low income consumers who buy health plans in the 36 states where the federal government, and not the states, runs the system’s “health exchanges.”

As a fan of this expanded health coverage, I think that’s bad because it puts that expansion at risk based on a drafting glitch in the Act. More broadly, though, I think it is bad because the Court’s decision to take a case like this now, with only one appellate court decision on the topic, looks unnecessary, political, and, indeed, partisan. And that, too, is bad for the country ­– and the Court.

The argument against the subsidies hinges on a small textual point. The provisions authorizing and, in some other respects involving, the subsidies refer to “exchanges established by the States,” not to federally-run exchanges. Similar problems exist in other sections of the rapidly cobbled together final bill and to (almost) everyone, it clearly makes no sense that Congress would intend to provide subsidies to consumers in states that ran their own exchanges but not in states that chose to let the federal government provide the exchanges. It’s fundamentally a silly argument, calling for a strict interpretation of a few words of statutory language in a way that would profoundly contradict the legislature’s intent.

But this isn’t “legislation.” This is Obamacare, known in some circles as the Apocalypse (or at least one of its horsemen).

And here’s what makes the Court’s decision to hear this appeal so scary. There’s only one reason for the Court to grant that review right now – to overturn a decision the Court, or at least the minimum of four justices who voted to grant cert, thinks is both important and wrong.

Usually the Court, which (lazily?) hears only about 80 cases a year compared with about 160 a year before the late 1980s, waits until it has to take a case because of a conflict in authority below. If a decision of the Secord Circuit, covering Connecticut, New York, and Vermont, squarely disagrees on the meaning and application of, say, the Fourth Amendment with the Ninth Circuit, covering California, Oregon, Washington, Idaho, Montana, Nevada, Arizona, Hawaii, Alaska, Guam, and the Northern Marianas Islands, the Court usually decides it needs to intervene. It is, after all, a bad thing for the Constitution to mean one thing for the FBI (and citizens) in one state and but to mean something else entirely in another. These so-called circuit splits can also arise when the highest court of a state disagrees about federal law with another state’s high court or a federal circuit.

Just witness the dance the Court has been doing to avoid having to decide whether state bans on same sex marriage are constitutional. Although it does not have to give – and has not given – reasons for these decisions, it has so far consistently refused to hear same sex marriage cases. These involve very important questions of constitutional law, but until November 6,[1] there was no circuit split.[2]

Just as, in the Obamacare case, there is no circuit split. The D.C. Circuit Court of Appeals did hear a parallel case and decided it, by a 2-1 vote, against the government, creating a circuit split. But in that case the government sought what is called rehearing en banc from the D.C. Circuit, a procedure in which all the active members of the court and senior judges who participated in the panel decision (a total of 13 judges in this case) rehear the case. The D.C. Circuit granted the request, which eliminated the panel decision and made the split go away, at least temporarily. And, given both the strength of the government’s case and the political and ideological make-up of the en banc D.C. Circuit, it seems as likely as any court decision can be that the en banc court will overturn the panel decision. Thus, no split exists – at least, unless and until another circuit court holds against the government on this point. At least two other challenges are pending, one from Indiana and one from Oklahoma. [3]

But still, why worry? Surely, the Supreme Court will make the right decision, or, at least, a fair and impartial one. Alas, on an issue with the political, and partisan, resonance of Obamacare, such an outcome can be hoped for, but not expected.

The great 2012 Affordable Care Act cases led to highly political alignments, both on the Commerce Clause issue that had seemed to be at the cases’ heart, and on the “tax clause” work-around by which Chief Justice Roberts prevented his Court from completely striking down a president’s major accomplishment ­– and possibly provoking major public unhappiness with a Court perceived as too political.

I hope I will be proven wrong, but it seems very likely to me that Justices Scalia, Thomas, Alito, and Kennedy – all vociferous dissenters in the original Obamacare case – will vote to strike down the subsidies. Similarly, I would be shocked if justices Ginsburg, Breyer, Sotomayor, and Kagan didn’t vote to uphold them. Chief Justice Roberts wrote the statute-saving majority opinion. How will he vote now? Three years later, with the president in question near the end of his terms and much less popular and a much narrower legal issue, the Chief Justice may well not feel the need to be so politically careful.

At least the first case involved some big, constitutional issues where no precedents were squarely on point. Personally I thought the majority got the Commerce Clause issue wrong and the state sovereignty (Medicaid) issues wrong (in ways less consistent with precedent and logic than one would like from an unbiased court) and may have gotten the Tax Clause issue wrong. But those were big legal and constitutional questions that, as a result of circuit splits and the importance of the statute, the Court had to decide. The question here of what “exchanges established by the States” means in a few clause of a huge statute is not of that stature, except in its possible consequences.

So why not at least wait to see if there’s a circuit split? Because, I can only assume, Justices Scalia, Thomas, Alito and Kennedy or Roberts (or both) want to take the case, overturn this important provision of Obamacare, and, dare I say it, save the Republican Party from the need actually to elect a President as well as a House and Senate to get rid of the clear and present danger of the federal government expanding health coverage to more Americans. Perhaps they fear there won’t be a circuit split and the more Courts of Appeal that rule for the government, the harder their case. More likely, they just don’t care in this case.

Of course, in a better world, having the Court make a mistake in interpreting legislation is not a big problem. The legislature can just pass it again, making clearer its intent. But the 2009 Congress no longer exists; its Democratic majorities in both houses gone in part because of its passage of Obamacare energized its Republican opponents. The GOP House and Senate do not have the power to kill Obamacare by action because of the prospect of a presidential veto. But they surely have, and equally surely can use, the power of inaction, which is invulnerable to the veto, to bring down Obamacare. (Kind of ironic that the action/inaction dichotomy that featured heavily in the Commerce Clause analysis in the original Obamacare cases would come back in terms of the difference between Congress’s action and inaction. Kind of ironic. Maybe?)

So what now? There is, I suppose, a chance that the conservative justices will take a count heads, see they are likely to lose, and, after the D.C. Circuit panel decision is reversed en banc, seek to have the case dismissed as improvidently granted. More likely, the case will be argued in late winter (the SCOTUS blog suggests the first week of March) and the decision announced in late June. And the fate of Obamacare subsidies, and hence health coverage, for millions of people in 36 states, will hinge on just how partisan Chief Justice Roberts and perhaps Justice Kennedy feel in late June – or how well they are able to convince themselves that they are not acting in a partisan fashion but from neutral principles.[4] I am not sanguine, for the Obamacare subsidies or for a Supreme Court that at least appears, to those paying attention, to consist primarily of judges and not primarily of partisan politicians in black robes.

I am not sanguine, but we live in hope. Because we must.

One last note. What happens if the subsidies are struck down? Presumably, people in the 14 states (plus the District of Columbia) that established their own state-run systems keep getting subsidies, and hence affordable health care, and people in the other 36 states don’t. In some of the latter states, state governments will quickly set up state health exchanges, or perhaps state health exchange authorities that then contract with the federal government to administer these “state” exchanges. But some more ideologically pure state governments will happily let the subsidies lapse and return their citizens to the nirvana of the health insurance “free market”. This almost certainly includes the 23 states ideologically pure enough to have rejected the Act’s Medicaid expansion money and thus to have allowed their citizens to pay federal income taxes that provide expanded healthcare for other states’ poor but not their own.

But might not the millions of people who, as a result, lose their health care be annoyed? Might not they vote out the Republicans, at state and federal levels, who brought about their loss of health coverage? Oops – I forgot. The GOP assault on voting rights, aided and abetted by the Supreme Court, should protect the Republicans from the wrath of their (relatively voteless) constituents.

Hank Greely

P.S.   Here’s some more coverage of this issue for those interested:

SCOTUS Blog, New York Times, Washington Post, VOX, and Slate

 

 

[1]           On that day a divided panel of the Sixth Circuit upheld laws against same sex marriage in several states in DeBoer v. Snyder and related cases. The Supreme Court may no longer be able to duck that issue.

[2]          Of course, even when there is a circuit split, the Court doesn’t have to do anything about it. No one can make it take a case. And, indeed, on some usually minor issues, the Court has allowed circuit splits, on less important issues, go to unresolved for years.

[3]           The Indiana case, Indiana v. I.R.S. is in the Southern District of Indiana, where it survived a motion to dismiss on grounds of lack of standing.   That case is a long way from a circuit decision on the merits. The plaintiffs in Oklahoma, Pruitt v. Burwell, won summary judgment in the Eastern District of Oklahoma at the end of September 2014.   The trial judge stayed his judgment pending appeal to the Tenth Circuit. Presumably, a 10th Circuit decision could come in sometime in 2015.

In theory a state Supreme Court could rule against the federal government and create a split, but it is very hard to see how they would get such a case.

[4]           One speculative aside: Justice Kennedy is not always on the same side as Justices Scalia, Thomas, and Alito. Notably, they disagree, strongly, on same sex marriage and, more broadly, on the constitutional protections for gays and lesbians. The very recent Sixth Circuit decision creating a circuit split on that issue means the Court is likely to decide it in late June as well. Might open war between those justices and Justice Kennedy on same sex marriage (and Justice Scalia does open war very well) affect the outcome of this Obamacare case? Stranger things have happened.

1 Response to Bad News for Obamacare – and America
  1. While we live in hope indeed, I’m not nearly as sanguine about how the (likely) demise of the ACA will play out politically. We all know what “floats to the top.” People will wake up one day in June without healthcare, they’ll hear it’s because President Obama and the Democrats screwed up the drafting of the legislation (“I don’t know what’s in it, I haven’t even read it!” as the right-wing soundbyte goes), and they’ll direct their ire in precisely one direction — left. I rather fear that the outcome of the 2016 election hangs in the balance.

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