With its 6-3 decision Thursday upholding the Affordable Care Act's federal subsidies for health insurance buyers in all 50 states, the U.S. Supreme Court wrote an end to the discreditable effort by anti-Obamacare partisans to undermine the law via the lawsuit King vs. Burwell.
Constitutional law experts generally regarded the King challenge as a fatuous and specious misreading of the law and a tortured effort to bend the process of statutory interpretation for ideological ends. In brief, the right-wing advocates that funded the challenge and provided its intellectual foundations, such as they were, argued that a four-word clause in an obscure provision of the ACA was deliberately designed to effectively undermine the law itself.
The provision, read literally and in isolation, appeared to restrict subsidies only to residents in states that set up their own exchanges for the individual insurance market. (California is one of those states.) That would have barred subsidies for as many as 6.5 million people in the three dozen states that relied on the federal insurance marketplace, healthcare.gov.
The administration and the law's other defenders maintained that this was a strained reading of that provision that was contradicted by the rest of the law. Whether the Supreme Court would accept their viewpoint and the decades of precedent it relied on was thrown into doubt when the court accepted the case for review late last year.
In the event, Thursday's ruling, written by Chief Justice John G. Roberts Jr. with the concurrence of Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, Anthony Kennedy and Sonia Sotomayor, accepted the government's position virtually 100%. The challengers' position, Roberts wrote, was "unpersuasive," "untenable" and "implausible." It would lead to an insurance "death spiral" in the unsubsidized states as insurance was priced out of reach for millions of residents, prompting all but the sickest customers to stay in the insurance pool.
"Congress passed the Affordable Care Act to improve health insurance markets," Roberts wrote, "not to destroy them."
Who are the winners from this decision?
First, they include the Supreme Court itself. With the occasional exception, the court is traditionally wary of being seen as political agent. That's likely what stayed its hand after a string of anti-New Deal decisions in the 1930s, until it reversed course in 1937, and may have animated its upholding of the ACA itself in 2012. (In a decision also written by Roberts.)
A remarkable aspect about the pro-ACA experts commenting on King vs. Burwell in the months leading up to the decision was that almost unanimously they presumed that an adverse court ruling would be based on partisan ideology, not the law. This was not merely because the statutory grounds for such a ruling were so meager, but because the consequences for millions of people would be so dire and plainly in contradiction of the law's purpose. Roberts' decision has wiped out such doubts.
Republican officeholders are condemning the court decision virtually unanimously, but they're big winners too. The crisis an anti-ACA decision would have created for Americans dependent on insurance subsidies would fall hardest on states whose GOP leaderships have refused to set up state exchanges.
As decision day approached, most were flailing about for a remedy. In almost every such state, there existed almost no possibility of hastily creating a state exchange to forestall the loss of insurance for thousands of constituents. Congress could step in with a one-sentence fix to the ACA, eliminating the ambiguity seized on by the King plaintiffs, but the Congressional GOP showed no willingness to do so and continued to talk about repealing the law as if that were a simple matter or a rational step. It would be neither.
Some in the GOP expressed the conviction that an anti-subsidy court decision could be spun to make President Obama and the Democrats look bad, but that was not a safe bet. More likely, the chaos created by such a ruling would expose the GOP's basic lack of interest in a comprehensive healthcare policy and its utter inability to craft an alternative to Obamacare despite five years of promising one. Plainly, the court helped the GOP dodge the chaos threatened by the party's failure to engage with the need for healthcare reform. For now. More needs to be done to bring healthcare to more Americans, and the GOP must participate.
High on the list of losers from the court ruling are the ideologues who cooked up the challenge and the politicians who treated an adverse ruling as inevitable, praise be.
Among them are the Cato Institute's health policy director, Michael Cannon, who long has displayed a questionable grasp of the realities of the health insurance market in general and the ACA in particular. See my analyses of his viewpoint here and here. Cannon's argument on behalf of King vs. Burwell always had the flavor of a flagrantly ideological take dressed up with legalistic vocabulary, and his response to the decision Thursday is more of the same. It's headlined, "Supreme Court Validates Obama's Power Grab."
The decision is "allowing [Obama] to tax, borrow, and spend $700 billion that no Congress ever authorized," Cannon continues. Well, no. The court ruled, pretty decisively, that the spending on subsidies was indeed authorized by Congress. Anyway, Cannon's portrayal of the ruling in terms of President Obama's personal actions tells you what the point of the lawsuit always was.
The decision destroys the assumption in Republican anti-ACA rhetoric that Obama and his administration acted in providing subsidies in all states. It's the most powerful pro-ACA decision that the law's supporters could have hoped for; as Greg Sargent observes in the Washington Post, not only is the 6-3 majority larger than even the most optimistic pundits expected, but Roberts' legal grounds for the decision will tend to inoculate it from reversal by a future administration.
More important, the decision should clear the decks for efforts to close the gaps in the ACA that do exist. First and foremost, it's time for the 22 largely Republican-led states holding out against the law's largely federally funded expansion of Medicaid to give in, and use it to cover more of the poor. It's time to accept that the ACA is the law of the land and already deeply interwoven into the American healthcare system, for the better. It's time for Republicans to join with Democrats in building on that, and finally creating an American system that serves people as well as those of our competitors in the rest of the developed world.