WASHINGTON — Supreme Court justices split along ideological lines Wednesday in a dramatic but collegial showdown in the latest legal battle over the Affordable Care Act, with the outcome difficult to predict.
At issue in the current case is whether millions of Americans who receive tax subsidies to buy health insurance are doing so illegally. If President Barack Obama could draw hope from the hour and 25 minutes of debate about his signature domestic achievement, it would be because of Justice Anthony Kennedy.
Three years ago, Kennedy was among the four dissenters who would have found the entire act unconstitutional. On Wednesday, with his comments and questions seeming to cut both ways, he appeared to be back in play.
The outcome also could hang on Chief Justice John Roberts. He wrote the opinion saving the health care law from a constitutional challenge in 2012, but he was inscrutable this go-round, asking no questions that would provide a clear reading of his inclinations.
Challengers to the subsidies say a straightforward reading of the law means the credits are available only for those who buy insurance on marketplaces, called exchanges, that are “established by the state” rather than on a federal marketplace.
“Death spiral”
The subsidies are a linchpin in the program to require Americans to buy health insurance. A ruling against the administration would have adverse consequences for an estimated 7.5 million Americans who now receive subsidies in the 34 states where authorities have declined to establish their own exchanges.
The potential consequences for those states seemed to most concern Kennedy, the court’s leading advocate of federalism.
He told Washington lawyer Michael Carvin that the challengers’ reading of the law — which he characterized as telling the states “create your own exchange, or we’ll send your insurance market into a death spiral” — is the kind of coercive pressure the federal government is not allowed to apply.
“Perhaps you will prevail in the plain words of the statute, (but) there’s a serious constitutional problem if we adopt your argument,” Kennedy said.
Carvin said that plain reading must be what guides the justices.
“The only provision in the act which either authorizes or limits subsidies says, in plain English, that the subsidies are only available through an exchange established by the state,” Carvin said.
But the law also requires federal authorities to step in when states have not developed their own exchanges, and the court’s four liberals seemed to have no doubts that meant the subsidies follow.
To read the law as literally as he does, Justice Elena Kagan told Carvin, would mean Congress authorized the establishment of federal exchanges “in which there will be no customers and, in fact, there will be no products.”
She added, “We are interpreting a statute generally to make it make sense as a whole, right? We look at the whole text. We don’t look at four words. We … try to make everything harmonious with everything else.”
Solicitor General Donald Verrilli, representing the Obama administration, made a similar point.
He said the law meant to provide states with flexibility and avoid “death spirals” in insurance markets, which could occur if not enough healthy individuals are enrolled to make the system financially viable. The challengers’ reading of the law, he said, would put coverage beyond the reach of many.
“It revokes the promise of affordable care for millions of Americans,” Verrilli said. “That cannot be the statute that Congress intended.”
“Of course it could be,” said Justice Antonin Scalia. “I mean it may not be the statute they intended. The question is whether it’s the statute that they wrote.”
“Twist the words”
Scalia and fellow conservative Justice Samuel Alito were the most challenging of Verrilli. Scalia said it was not up to the court to “twist the words” of a law to make it fit what the administration said Congress intended.
Alito asked Verrilli the question he had the most difficulty answering: “If Congress did not want the phrase ‘established by the state’ to mean what that would normally be taken to mean, why did they use that language? Why didn’t they use other formulations that appear elsewhere in the act? Why didn’t they say ‘established under the act’? Why didn’t they say, ‘established within the state’?”
Scalia said lawmakers could fix the problem if they thought the court had misinterpreted their intent.
“You really think Congress is just going to sit there while — while all of these disastrous consequences ensue?” Scalia asked.
“Well, this Congress, Your Honor?” Verrilli replied, as laughter filled the packed chamber.
White House press secretary Josh Earnest
resisted questions about what the administration would do if it loses.
“There is no contingency plan that could be implemented to prevent the catastrophic damage that would be done,” he said. “We would see millions of people lose their health insurance, prices would likely go through the roof, and there’s likely not a whole lot the government could do about it.”
