It’s ironic that the future of the Affordable Care Act (“ACA;” “Obamacare”), with it’s all-consuming scope that impacts 1/6 of the U.S. economy under the guise of healthcare reform, may reside with the vote of the nine jurists on the Supreme Court. In all likelihood, the actual outcome will rest with just two, Justices’ Roberts and Kennedy. A 5-4 or 6-3 decision, either way, should not surprise court-watchers.
In the current court case, King v Burwell, the issue at stake is whether subsidy payments can be made to those who purchase their health insurance coverage from the federal exchange (“Healthcare.gov,”) as opposed to a state exchange. Proponents of the ACA claim that the language in the law that clearly states that subsidies are only available to those who receive their coverage from an exchange “established by a State,” was a drafting error. This should not be a tough read, particularly when the word “State” was defined in the Act to mean an individual State with a capital “S.” As I point out in my new book, Killing Healthcare: How the ACA is Murdering the U.S. Healthcare System (http://wbcbaltimore.com/books/ ), Dr. Jonathan Gruber, an M.I.T. economics professor and a principal consultant who helped develop the ACA, claims that this “oversight” was crafted intentionally. Gruber says that the limitation of subsidies to only state exchanges was designed to induce the states to establish their own exchange. When 34 states still did not take the bait, Obamacare was set up for this type of legal showdown.
Keep in mind that this is Round 2, same court but different issue. The first Supreme Court review occurred in 2012 and addressed the issue of whether the ACA had the authority to mandate individuals purchase health insurance or face a penalty. That review resulted in a 5-4 decision when Justice Roberts sided with his more liberal-leaning colleagues to opine that the proposed penalty for not buying health insurance was not a fee, but in fact, a tax, and fell within the taxing authority of Congress.
The latest opinion, may in fact, be already completed, and is only being held for a future public release. The announcement is expected before the end of June, and may actually occur next week. Based on the questions asked by the Court during oral arguments, many commentators have predicted that Kennedy and Roberts would vote to maintain the subsidies. I believe this is a likely outcome, and one that hinges not on the letter of the law (I believe the law language is crystal-clear), but the desire to not be held responsible for a media blitz that will claim that the country’s health insurance marketplace is in turmoil as a result.
Interestingly, there is a dramatic change in the comments coming out from the Obama Administration this week regarding the decision. In the past, Health and Human Services Secretary Burwell and other Obamacare surrogates, have stated that there is no contingency plan in place in the event the subsidies fail. They present an opinion that thinking of an alternative is impossible, because of the chaos that would ensue. This week, however, even President Obama, after giving a cheap shot to the Court, says that Congress would be able to fix the problem easily, by simply agreeing to edit that little four word sentence mentioned above (“established by a State.”) This current tone makes me wonder if the Court’s decision has been leaked and has come down against the subsidies, and whether the Administration is trying to put pressure on Congress for quick fix?
As usual, stay tuned. This will be a big one!