Make it 2-0 in favor of the Affordable Care Act. The Supreme Court (“SCOTUS”) on Thursday announced their decision to allow subsidies to be paid to participants who qualify, regardless of what type of exchange sold them their health insurance coverage. Regarding the matter in King v. Burwell, the court ruled 6-3 with Justices Roberts and Kennedy joining the Court’s 4 liberal jurists. This was exactly the outcome I predicted in my new book, Killing Healthcare: How the ACA is Murdering the U.S. Healthcare System. (http://www.wbcbaltimore.com/books/).
Writing for the dissent, Justice Scalia said “words no longer have any meaning.” He, along with Justices Alito and Thomas, felt the “established by the State” meant what it says, and as it reads. Only those exchanges established by a State could receive a subsidy to offset the cost of a participant’s insurance premiums. The majority opinion on the Court, however, disagreed, and felt that it was not the intent of Congress to keep people from obtaining coverage by denying them a subsidy. The majority opinion said “in this instance, the context and structure of the Act compels us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” Huh? Scalia is right when he says Obamacare should now be referred to as “SCOTUScare!” This ruling, along with their case in 2012 regarding the individual mandate, keeps the ACA afloat. Justice Roberts said “Congress passed the Affordable Care Act to improve health insurance markets, not destroy them.” (This statement particularly galls our more skeptical readers who consider a more sinister objective that was not intended to improve the health insurance market.) So I guess it’s up to the Court to determine the intent of Congress, independent of the language in the statute! He also goes on to say that losing the subsidies would jeopardize the Act by creating a “death spiral” (when younger, healthier people drop insurance coverage leaving only the sickest members in the plan). It appears that some laws are more important than others and will always receive the home field advantage.
As I point out in Killing Healthcare, the Supreme Court is not immune to public opinion. They read the newspapers, listen to the evening broadcast and attend the Washington cocktail party circuit. Being targeted as a major disruptor is not a popular position to hold inside the D.C. beltway. This ruling enables the continuity of the new status quo. Wall Street has responded by driving hospital and insurance company stocks higher (the Street likes stability as much as Washington)!
Justice Scalia’s position is that poorly drafted legislation remains the purview of Congress to fix, not the Court! With this decision, the majority opinion discounts the testimony of Dr. Jonathan Gruber, the M.I.T. economics professor who was a major contributor to writing the law. Dr. Gruber claimed that limiting the subsidies to State exchanges was drafted by design as a means of enticing a State to establish their own exchange. He said that they told States that their resident participants would not receive subsidies unless they played ball. The strategy seemingly backfired when 34 States declined the offer, thus creating the legislative stew that the Court has addressed.
While President Obama is declaring that the ACA is “here to stay,” it remains to be seen what the ultimate outcome will be and will fall into the laps of the next president and Congress. Stay tuned! This will remain a political hot potato!