The Obama administration has reason to feel encouraged after the latest challenge to the president’s health care reform encountered stiff resistance from the Supreme Court’s liberal bloc and failed to gain visible support from all five conservative justices.
All four liberal justices — Ginsburg, Breyer, Sotomayor, and Kagan — aggressively questioned the challengers’ attorney, veteran conservative Washington lawyer Michael Carvin, during his time at the lectern. Conservatives Scalia and Alito had hard questions for Solicitor General Donald Verrilli as he argued the administration’s side, but got no significant support from either Roberts or Kennedy.
Significantly, however, Kennedy signaled more than once a possible leaning toward the administration’s position and Roberts, as chief justice, kept his options open by asking only one substantive question during the expanded 80-minute session. By end of argument, a 6-3 ruling for the administration seemed to be a possibility, while a 5-4 ruling for the challengers — even counting the silent Thomas as a presumed vote — seemed harder to envision.
The transcript of the arguments in King v. Burwell shows they were neither pretty nor entertaining. Breyer described the statutory provisions at issue as similar to the tax code – a comparison not ordinarily seen as a compliment. Later, Scalia pointedly remarked that the 1,000-page Affordable Care Act was “not an elegantly drafted statute.”
The dispute was so deep into the statutory weeds that it is perhaps no surprise that the potential conflict between infamous section 1311 and notorious section 1321 was not identified until more than a year after the ACA was signed in March 2010. In 1311, tax credits are to be provided for low- and middle-income persons who buy insurance through a health care exchange “established by a state.” But if a state chooses not to create an affordable health care insurance marketplace, then section 1321 says the federal government — specifically, the secretary of Health and Human Services — will establish “such exchange.”
The four Virginians chosen as plaintiffs in this, the third major challenge to Obamacare, all say that they do not want to buy health insurance and that without the law’s tax credit they won’t have to because of the act’s “unaffordability exemption.” Virginia is one of 34 states that has chosen not to set up a health care exchange and instead let the feds do it.
Representing the plaintiffs, Carvin told the justices that the law provides, “in plain English,” that the tax credits are provided only if a state has created an exchange. “This is a straightforward case of statutory construction where the plain language of the statute dictates the result,” he said in his opening sentence.
Liberal justices were unconvinced. Breyer said the secretary’s obligation to create “such exchange” referred to one that would satisfy section 1311. “So what’s the problem?” he asked. Kagan followed by rejecting Carvin’s reliance on the “plain language” of the law. “The answer really does depend on the context,” she said. “It’s the whole structure and content of the provision.”
In her turn, Sotomayor noted that Carvin’s argument in effect penalized states for not creating health care exchanges by denying subsidies to their residents. “Tell me how that is not coercive in an unconstitutional way,” she said. Tellingly, Kennedy appeared to echo the point. If your argument prevails, he told Carvin, there is “a serious constitutional problem.”
Roberts allowed Carvin an extra 10 minutes because of the frequent questions and offered the same to Verrilli as he took the lectern. To Carvin’s argument, Verrilli said bluntly that it would create “an incoherent statute that doesn’t work.” The challengers’ argument, he said, would create a “death spiral” in insurance markets as rates rose for a dwindling number of customers and would also “revoke[ ] the promise of affordable care for millions of Americans.”
“That can’t be the statute that Congress intended,” Verrilli said.
Scalia rejected the logic. “It may not be the statute they intended,” the co-author of a book on statutory interpretation said. “The question is whether it’s the statute they wrote.” He amplified later: “If it can only reasonably mean one thing, it will continue to mean that one thing, even if it has untoward consequences for the rest of the statute.”
Later, Alito pressed Verrilli to answer the liberal justices’ suggestion that Carvin’s argument would make the statute unconstitutionally coercive. Verrilli replied noncommittally that it would be “a novel question” but that the government would attempt to defend the law. Alito’s question backfired, however, when Kennedy joined in to cite the doctrine of “constitutional avoidance” in effect as an argument for rejecting the challenge.
In contrast to Carvin’s boisterous and demonstrative demeanor, Verrrilli appeared calm and straightforward throughout his allotted time. Toward the end, he elicited the only substantive question from the chief justice. Verrilli said that if the court saw the statute as ambiguous, it should still uphold the Internal Revenue Service’s regulation interpreting the law under so-called Chevron deference — an established doctrine named after a 1984 precedent.
If the court ruled that way, Roberts asked, could the next administration change it? Verrilli replied in the affirmative. In context, the question evoked Roberts’s closing line in his 2012 opinion upholding most of the Affordable Care Act while deferring to the political process. “[T]he Court does not express any opinion on the wisdom of the Affordable Care Act,” Roberts wrote in National Federation of Independent Business v. Sebelius (2012). “Under the Constitution that judgment is left to the people.”
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