By Miranda Crowell
In what some legal scholars are calling a “sleeper” case, the next challenge to the Affordable Care Act (ACA) was argued before the Supreme Court on March 4, 2015. King v. Burwell has likely been flying under the radar because of its über technical questions of standing, administrative law, and statutory interpretation, leaving the non-lawyer (and even most lawyers) scratching their heads.
Here is the skinny on this not so small case. In short, Petitioners, financed by the Competitive Enterprise Institute, are Virginia residents who did not want to purchase comprehensive health insurance. The Petitioners brought an action to challenge the Internal Revenue Service’s final rule which implemented a premium tax credit provision of the ACA. This final rule interprets the ACA as authorizing the IRS to grant tax credits to persons who buy health insurance on both federally- and state- facilitated “exchanges.” The Petitioners, making a textual argument, insist that tax credits can only be authorized for individuals who purchase insurance on state-ran exchanges. On the other hand, the government’s position is that tax credits can be authorized for persons who purchased insurance in both federally- and state- facilitated exchanges. Thirty-four states have federally-ran exchanges; thirteen states and the District of Columbia operate their own exchanges. Three states operate as a federal-state hybrid. As complex as the issues are in this case, the Justices will be asked to interpret and provide a final ruling on these four words: Exchange established by the State. But as we all know, a plain reading of the words in isolation is not the end of the road; even the capital letter “E” provides clues that will help the Justices make this gargantuan decision.
It is important to know that predicting the outcome of a case based on oral argument outcomes is a dangerous rabbit hole, but oral arguments can be helpful in convincing any Justices sitting on the fence of an issue. Without sending our readers into a never-ending saga on whether or not §1311 is properly deemed a “definition” or that misnomer is more properly characterized as a requirement, we do know a few things after oral argument. First, the theme of King v Burwell is undoubtedly federalism, and the Solicitor General did lean in on this theme. Second, while the Court did raise some questions on the issue of standing, it does not seem that standing or mootness will impede the Court in reaching the merits of the case. Third, Mr. Carvin, arguing for the Petitioners, raises a reasonable and fair argument (through the slightly comical overuse of the word “scintilla”) that a plain language reading of the statute will operate in favor of petitioners. And for anyone who follows the highest Court, you already know that Justice Scalia consistently supports a textual interpretation. Lastly, Justice Kagan received a host of laughter with an analogy about a memo assigned to her clerks, and she noted that, surely, Congress did not intend what she classified as a “Draconian choice” for the states. (And as an aside, Twitter user @SCOTUSHUMOR tallies Kagan as the true winner of SCOTUS laughs in Burwell.)
According to Reuters, 7.5 million people in at least the 34 states operating federally-ran insurance exchanges will lose subsidies if the Petitioners prevail. These subsidies assist low- and moderate-income people in affording insurance. If the Petitioners prevail, it is safe to say that the individual insurance market will be disrupted in a big way. But on the other hand a Government win will set precedent for great levels of deference to agencies. President Obama thinks this is a pretty straightforward case in favor of the Respondents (the Government), but legal scholars such as Jonathan Adler side in favor of the Petitioners. No matter which side of the issue you fall on, King v. Burwell will play a key role in the ACA moving forward.