Supreme Court Hears ObamaCare Case
March 6, 2015 10:43 AM
Earlier this week, the United States Supreme Court heard oral arguments on a case that could have significant implications for President Obama’s signature domestic achievement, the Affordable Care Act (ACA), also known as “ObamaCare.” The focus of the case, King v. Burwell, surrounds the legality of insurance subsidies to individuals purchasing health insurance through the federal marketplace.
According to the well-respected blog focusing on the Supreme Court, SCOTUSblog.com:
The ACA requires states to create “exchanges” – essentially, marketplaces – for their residents to buy health insurance. But if a state refuses, the federal government will provide the exchange. The law then provides tax credits for people who need financial assistance. Without the subsidy, many people will not be subject to the “individual mandate” to buy insurance. An employer also is required to make insurance available only if its employees receive the subsidy.
The Obama Administration has issued a rule saying that the tax credits are available for purchases not just under state exchanges but also in the roughly three dozen states in which the federal government provides the exchange. Roughly 5.4 million people have purchased insurance through the federal exchange, and almost ninety percent of them have received the subsidy. Many could not afford insurance without it…
The legal argument that is central to the case, as outlined by SCOTUSblog.com is that:
The law establishes a formula for determining the tax credits. It applies to insurance that is purchased through an exchange “established by the State.” It does not mention the federal exchange. The challengers argue that this language is clear: the tax credits are available only for purchases through the state exchanges.
Courts are required to apply the laws that Congress enacts and to strike down rules that violate clear statutes. On the other hand, Congress passes a lot of laws that aren’t clear. In those cases, courts are required to uphold rules that reasonably resolve ambiguities in the statutes.
In the oral arguments presented by the parties on March 4, 2015, each focused on its strongest points. The Petitioner (the party seeking to invalidate the rule that extended subsidies to federal exchange insurance enrollees) argued that the plain language of the law limited subsidies to those states that operated their own insurance exchange. Also, it was argued that the reason for the limited access to subsidies was to encourage states to set them up rather than have the federal government do it.
The Respondent (the US Department of Health and Human Services) argued that the law must be read in its overall context and that subsidies were intended in all states regardless of the nature of the exchange. HHS argued that it had the discretion to read the law broadly.
The Supreme Court Justices seemed divided along ideological lines with the conservative justices attacking the HHS position and the so-called liberal justices going after the Petitioners arguments. Justice Clarence Thomas sat silently as he usually does. Most observers think he will side with the Petitioners. Justice Roberts appears to be the most likely swing vote in the divided court. He focused on whether the Petitioner’s reading of the law would create a constitutional question involving forcing states to set up an exchange to qualify its citizens for a subsidy. Chief Justice Roberts, another swing vote possibility, had little to say other than to raise concerns that giving the government too much regulatory discretion might mean that the interpretation is subject to change by the next administration.
If the Court rules in favor of the petitioners, more than nine million people could instantly lose the subsidies that helped them to purchase private health insurance. With such an outcome, many people will either lose their health insurance, have to pay more for it, or go back onto Medicaid. A ruling for the petitioners could also potentially lead to difficulties in obtaining home care services through Medicaid as individual states will be forced to come up with solutions for maintaining access to health services while dealing with an onslaught of new beneficiaries.
On the other hand, a ruling for petitioners would have the effect of eliminating the daunting employer mandate in many states. That mandate is based on individual employees qualifying for an insurance subsidy. If there is no subsidy, there is no penalty that could be imposed against employers that do not provide health insurance to workers employed 30 hours or more per week. A NAHC survey indicates that most Medicaid-focused home care companies as well as most private pay personal care services companies do not provide a qualified health insurance to all of their full time employees. As a result, there is a high risk of a large financial penalty under the ACA employer mandate.
JA decision is expected before the end of June when the Supreme Court closes its 2014-2015 term.