WASHINGTON — The Supreme Court handed President Obama a major victory Thursday, rejecting a conservative bid to undermine a key element of the Affordable Care Act and saying critics seized on an “implausible’’ argument.
The 6-3 ruling marked the second time the Supreme Court endorsed the landmark 2010 law and cemented the expansion of health insurance as part of President Obama’s legacy. It also avoided widespread disruption in health care markets that would have resulted if the challenge had been successful.
Siding with the White House, the court ruled that the government is permitted to offer financial assistance in all states, in the form of tax credits to help lower- and middle-income people buy the mandatory insurance required by the health law.
Conservative lawyers who brought the case argued that Congress, when it drafted the law, wanted to limit that financial help to the 16 states operating their own online insurance markets. So if the plaintiffs had prevailed, 6.4 million people in 34 states that rely on the federal government’s insurance marketplace would have lost federal subsidies.
But the majority of justices, in an opinion written by Chief Justice John G. Roberts Jr., said the plaintiffs’ assertions defied a common-sense reading of the statute and badly misinterpreted congressional intent.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Roberts wrote.
Many observers were surprised the case had even made it all the way to the Supreme Court, because it rested on a strict reading of a single, four-word phrase in a 900-plus-page law. The majority of justices acknowledged the law was riddled with imprecise language, but they said there was never any real question about what Congress intended.
Roberts and Justice Anthony M. Kennedy joined the four liberals on the court — Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor, and Elena Kagan — in keeping the ACA intact. The three most conservative justices, Antonin Scalia, Samuel A. Alito Jr., and Clarence Thomas, dissented.
“We should start calling this law SCOTUScare,” Scalia wrote, playing off the acronym for the Supreme Court of the United States and what critics of the law had nicknamed “Obamacare.” He accused the majority of engaging in “interpretive jiggery-pokery.”
Obama, in remarks in the Rose Garden, appeared satisfied but avoided gloating over a law that has sharply divided Americans and remains a hot-button issue in congressional elections and in the 2016 presidential campaign. “The Affordable Care Act is here to stay,’’ he said. “What we’re not going to do is unravel what is woven into the fabric of America.”
At issue was whether the health insurance subsidies that are a core part of the law should be provided in all states, including those where the online marketplace was operated by the federal government, or only in states that run their own. In New England, Massachusetts, Vermont, Rhode Island, and Connecticut operate exchanges; Maine and New Hampshire rely on the federally run exchange.
Roberts wrote that the subsidies should apply in all states, regardless of whether the insurance marketplaces were run by the states or the federal government, “to avoid the type of calamitous result that Congress plainly meant to avoid.”
This was the second time that Roberts played a role in protecting the Affordable Care Act. In 2012, the chief justice was the unexpected swing vote to uphold the law’s requirement that individuals purchase insurance or face a tax penalty.
In Thursday’s ruling, sounding even more like a booster for the law, Roberts cited Massachusetts’ 2006 health care law as the model. In order to guarantee that individuals have access to health coverage regardless of their medical backgrounds, the law needs to mandate people buy insurance and, at the same time, make it affordable through tax credits.
“The combination of these three reforms — insurance market regulations, a coverage mandate, and tax credits — enabled Massachusetts to drastically reduce its uninsured rate,” Roberts wrote. “The Affordable Care Act adopts a version of the three key reforms that made the Massachusetts system successful.”
The case, King v. Burwell, was argued before the Supreme Court in March. The challenge was brought by four Virginia residents who did not want to buy insurance on the grounds that they did not qualify for subsidies because Virginia has an insurance marketplace run by the federal government.
The question before the court was this: Did Congress literally mean to limit subsidies by geography when it wrote that individuals would only qualify when buying insurance through “an exchange established by the state?”
“The Affordable Care Act contains more than a few examples of inartful drafting,” Roberts wrote. The phrasing may seem plain when viewed in isolation, he said, but such a reading turns out to be untenable in light of the statute as a whole.
Scalia, employing his typically colorful phrasing, strongly disagreed.
“That is of course quite absurd,” Scalia wrote. “Today’s interpretation is not merely unnatural; it is unheard of. Who would ever have dreamt that ‘Exchange established by the State’ means ‘Exchange established by the State or the Federal Government’?”
Scalia accused his colleagues of playing favorites and rewriting the language of the landmark health law in order to uphold it. “Under all the usual rules of interpretation, in short, the Government should lose this case,” Scalia wrote. “But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.”
The outcome is something that lower courts likely would have concluded, without the Supreme Court’s intervention, several constitutional law and health care experts said.
“There really was no reason for the court to swoop in as early as it did,” said Abigail Moncrieff, a Boston University law professor specializing in health and constitutional law. “The overall statute is clear enough even though the language is slightly problematic.”
As for whether the law is now woven into the permanent fabric of American life, as Obama asserted on Thursday, the law’s advocates are not so confident.
“Maybe there will not be any more existential threats to the statute but no doubt there will be more litigation to come,” Moncrieff said. “I thought this was a frivolous lawsuit that wasn’t going anywhere when it was first brought up.”
John McDonough, a Harvard public health professor who helped craft the Massachusetts and federal laws, said there are at least a dozen continuing court challenges to the law, but the window of opportunity for judicial repeal is rapidly shrinking.
“Today, more than five years after passage, the law is more secure than it has ever been,” he said, though he cautioned that a Republican president might take aim at the law.
Renee Landers, a Suffolk University law professor focused on health law, said even Republicans in Congress who oppose the law should breathe a sigh of relief that the ruling upheld the subsidies.
“If the plaintiffs had won, it would be open season to picking through everything that Congress has done,” Landers said. “The government can’t function with the constant threat that these little statutory inconsistencies are going to come back to blow up major programs.”
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Tracy Jan can be reached at email@example.com. Follow her on Twitter @TracyJan.