Will Supreme Court Kill Obamacare?

Supremes Take the Case: Nov. 10: As we assumed, the Supreme Court will hear the controversial question of whether the government can offer subsidies to those using the federal exchange. The following article from September explains.
    
Lawsuits, four in total, are wending their way through the appeals system and one, or their composite, is sure to arrive on the steps of the Supreme Court. They are based on a flaw in the wording of the law that plaintiffs hope will be enough to cripple the Affordable Care Act and send it to an early grave. The justices will be handed a clear case of letter of the law versus its intent. Federal courts have so far come down on both sides.

At issue is the text that provides for tax credits — referred to more commonly as subsidies — to be granted to qualified people who sign up for insurance "through an Exchange established by the State". But for states unwilling or unable to mount their own exchange, the law provides for the federal government to establish and manage an exchange in their behalf. Missing is any explicit wording that says the federal government is also authorized to pay subsidies to persons who sign up on the federal exchange.

A slip of the pen, say those who maintain that the mission is the same no matter who administers the exchanges. The obvious intent is for all Americans to be treated equally.

Not so say opponents. The law is the law and the government must follow its exact wording. Or they say it was not a slip: the omission was deliberate to goad the states to create their own exchanges as the requirement for their residents to be eligible for the subsidies, that this is common practice, just look at Medicaid, which is offered only to cooperating states.

Not the same, goes the counter-argument. Under Obamacare the federal government is charged with the responsibility to serve in the stead of a non-cooperating state. A claim that the government should then penalize the citizens of those states by depriving them of subsidies is outlandish and shameful sophistry on the part of those bent on sabotaging the Act.

Two who claim they "were the first to draw attention" to the President's illegal action of allowing the federal government to pay subsidies, Jonathan Adler of Case Western University and Michael Cannon of the Cato Institute, claim in a Wall Street Journal op-ed that they "came up empty" in trying to find "some statutory language…or contemporaneous quotes from the law's authors" to support the claim that the Affordable Care Act intended subsidies to flow from the federal exchange. Those in the opposite camp say surely, a policy that advocated depriving federal exchange applicants from receiving subsidies would have triggered vigorous debate, but there was nary a mention in all the years it took to craft the law.

On the same day that a federal appellate court in Richmond, Virginia, turned away a letter of the law claim, a three judge panel of an equivalent court in the District of Columbia decided in Halbig v. Burwell that the letter should rule. The author of the majority opinion, Judge Thomas Griffith, a George W. Bush appointee, recognized the damage the ruling would inflict on the Affordable Care Act but wrote, "high as those stakes are, the principle of legislative supremacy that guides us is higher still".

That the decision is at odds with the goal of the law perhaps explains why Judge Griffiths' own appeals court set aside his panel's 2-1 ruling and announced that it would hear the case en banc on December 17 — meaning that all 17 judges of that court will review and decide.

Unless all four cases align with rulings that the intent of the law should prevail, the administration is sure to appeal to the Supreme Court, where the conservative wing will be handed an opportunity to destroy Obamacare by deciding that the letter of the law is to stand. Liberals fear that Chief Justice John Roberts may welcome the opportunity to reverse his apostasy of breaking ranks with conservatives when he allowed the insurance purchase mandate — and therefore Obamacare itself — to go forward. With 36 states defaulting to the federal government to handle their exchanges, prohibiting the federal government from paying subsidies to residents of those states would endanger the survival of the Act.

Those states will be doubly affects because so many also opted out of the government's offer to pay for expanded Medicaid. The low-income working families that finally have health insurance would see it effectively taken away. Unless those states relent and set up their own exchanges (which could be accomplished quickly by buying a system from another state), they will be left with the full slate of uninsured that existed pre-Obamacare.

As we show in the companion article, a high percentage of the new enrollees are dependent on the subsidy for making their insurance affordable. If the courts prohibit federally paid subsidies, the cost of the least expensive plans would eat up 23% of the average household's income. It would be unthinkable for the government to insist that everyone in those states nevertheless pay full rate for insurance, while inequitably subsidizing residents of the other states, so no one would be fined for not buying insurance. With the rule still in place that insurers cannot turn anyone away, people would be free to wait until sick before buying insurance. With only the sick buying, premium costs would soar. The system would spiral out of control. The healthcare plan would collapse. That is the chaotic scenario that hinges on the courts' decisions.