A death blow for Obamacare?
The moment the Affordable Care Act was enacted in 2010, it became a litigation magnet. The lawsuits threatening to derail it were initially dismissed as ridiculous but became deadly serious by the time Chief Justice John Roberts’s decisive fifth vote two years later barely upheld the law’s individual mandate, while the Court’s decisive 7-2 vote left the health law’s Medicaid expansion in tatters.
Last month, the court struck a second blow to the ACA by allowing some for-profit corporations to opt out of offering contraceptive coverage they deemed religiously offensive. And even House Speaker John Boehner is joining in the litigation, using the administration’s efforts to make the law more palatable by delaying implementation of one of its provisions as the centerpiece of his threatened lawsuit against the president.
But while Boehner’s empty threat makes headlines, a far more serious threat could deliver the death blow that the law’s opponents have been seeking. This new round of litigation attacks the health insurance exchanges at the heart of Obamacare. Congress designed the exchanges as markets to offer new, comprehensive, and often-subsidized insurance options to supplement the private market. The exchanges are the law’s linchpin — its primary means of making quality insurance affordable for millions of Americans.
The ACA required each state to “establish” an “American Health Benefit Exchange” by Jan. 1. If a state didn’t do so, the Department of Health and Human Services would step in to set up and run the exchange on the state’s behalf. The ACA treats exchanges run by HHS the same as those run by the states themselves. That’s crucial, because 36 states have deferred to HHS to set up their exchanges.
Opponents claim that the 36 states where HHS has set up and operated an exchange don’t have “state-established exchanges” at all. They argue that those states instead have “federally established” exchanges, even though that language appears nowhere in the law.
What’s in a name? Everything, say the challengers. They point to one sub-sub-section of the ACA that refers to an “exchange established by a state” to argue that people buying insurance on federally-administered exchanges are ineligible for the tax credits the ACA provides to make insurance affordable for millions of lower-income Americans.
If the challengers prevail, people of modest means in 36 states would be doubly damned. Besides being deprived of affordable care, they would also be subject to a tax penalty for not complying with the ACA’s requirement that they buy insurance. That penalty was designed to work in tandem with the tax credit: a penalty if you don’t buy insurance, but financial assistance to help you afford it. The challengers are trying to eliminate the carrot while keeping the stick.
Congress almost certainly didn’t intend this harsh result. In including the phrase “exchange established by a state” in the ACA, Congress probably meant to include those indirectly established by states that opted to pass to the federal government the burden of setting up and running these novel exchanges.
Challengers argue that Congress actually wanted to create this strange distinction among the 50 states — that lawmakers aimed to hold each state’s poorest residents hostage in order to pressure the state into creating and operating its own exchange. Ascribing that twisted view to Congress would offend core conservative principles of federalism. What’s more, it might even be unconstitutional, since Congress cannot penalize people for failing to buy insurance they cannot afford — or penalize states for exercising their rights as sovereign.
Although the ACA’s latest challengers should lose the cases they are pressing in four different federal courts, it’s uncertain whether the Supreme Court, which alone can finally resolve the issue, would agree.
Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito passionately denounced the entire ACA as unconstitutional in 2012, and Scalia and Thomas famously pooh-pooh talk of congressional “intent,” insisting on reading statutes literally. Believing as a matter of constitutional principle that the ACA exceeded Congress’s authority, they’re unlikely to be troubled by knowing that the challengers’ reading of the ACA would eviscerate its ability to achieve the law’s aims of near-universal health care coverage.
Four other justices — Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, Elena Kagan — have long believed in interpreting ambiguous statutes in a way that carries out their underlying purposes and makes them workable. Thus those four would almost certainly reject the challengers’ reading of the ACA.
So, when this case ultimately reaches the court, the ACA’s fate would again rest in the hands of Roberts, just as it did in 2012. If Roberts is true to his pragmatic judicial philosophy, he should find the challengers’ reading unconvincing. He has repeatedly held that, where fairly possible, a court should interpret an ambiguous law in a way that avoids finding the law unconstitutional. It was that principle that led him to vote to uphold the individual mandate and should lead him to side with the Obama administration in this latest round of attacks.
The huge uncertainty is whether he would do so again or would conclude that, because Congress created the present problem by its careless drafting, it’s up to Congress to fix it. Because Congress isn’t likely to come to the rescue, the health care of millions of Americans hangs in the balance.
Laurence H. Tribe is a university professor and professor of constitutional law at Harvard. His latest book is “Uncertain Justice: The Roberts Court and the Constitution.”