Obamacare’s insurance subsidies appeared a bit safer Wednesday after the Supreme Court heard the latest legal challenge to President Obama’s signature healthcare law.
The court won’t hand down its decision until June, and no one knows for sure how it will rule, but the justices most likely to sway the decision didn’t seem to give huge ground to those bringing the closely scrutinized King v. Burwell case.
“It seems to me that under your argument … there’s a serious constitutional problem,” Justice Anthony Kennedy, typically a swing vote on the court, told Michael Carvin, a Jones Day attorney who argued for the four individuals bringing the lawsuit.
The court has already upheld the Affordable Care Act’s requirement for Americans to buy health coverage. But this time another major component of the law was on trial: Its federal subsidies to help low- and middle-income Americans afford insurance.
The Obama administration says the subsidies can go to people in all states, while the challengers say the law withholds the subsidies from states relying on healthcare.gov instead of running their own insurance marketplaces. The case hinges on conflicting interpretations of both the healthcare law’s language and exactly what Congress intended when writing it back in 2010.
Questions had been raised in recent weeks over whether the challengers even have standing to challenge the law, but those concerns were mostly dismissed by both sides. Instead, the 90 minutes of oral arguments were dominated by discussions of whether the law’s overall intent should take precedence, what its text means and whether withholding subsidies is unfair to states.
All eyes were on Kennedy and Chief Justice John Roberts, who surprised many in 2012 when they ruled opposite ways than expected on the law’s individual mandate to buy coverage. At the time, Roberts said the mandate was constitutional while Kennedy would have struck it.
This time around, Kennedy appeared open to the administration’s position, although at one point he acknowledged the challengers might have the upper hand when it comes to the law’s language.
But Roberts gave few hints of where he stands. He said barely anything during the arguments, but at one point asked whether a future president could block the subsidies even if the Obama administration wins this round.
“If you’re right … that would indicate that a subsequent administration could change that interpretation?” Roberts asked Solicitor General Donald Verrilli Jr.
None of the justices questioned that striking the subsidies to the 37 federal-run exchanges would have catastrophic ripple effects on the healthcare law, not just costing millions of people their health plans but also causing premiums to rise. Between 7 and 8 million people in all 50 states are currently receiving subsidies.
But conservative Justice Antonin Scalia suggested that if the court does that, Congress could still step in and fix the problem, although Republicans would likely have difficulty agreeing on how to do that.
“Do you think Congress is going to sit there while all the disastrous consequences occur?” he asked Verrilli.
“This Congress?” replied Verrilli, prompting laughter in the courtroom.
“I don’t care which Congress you’re talking about,” Scalia responded.
The King dispute is over a section of the law that provides the subsidies but says they may be awarded in state-run exchanges without specifying whether that includes federal-run exchanges too. The challengers say it doesn’t—and Justice Samuel Alito,Jr. and Scalia seemed to agree.
“It may not be the statute [Congress] intended,” Scalia said. “The question is whether it’s the statute they wrote.”
But Verrilli said that interpretation makes it “an incoherent statute that doesn’t work.” And Justice Elena Kagan said that if Congress had actually intended to hinge the subsidies on states running an exchange, lawmakers would have said so more clearly.
“This took a year and a half for anybody to even notice this language,” Kagan said.
The other debate is over what Congress actually intended when writing the law, which aims to expand health insurance to poor Americans by giving them subsidies to buy private plans using online marketplaces.
The challengers insist Congress meant to encourage states to run their own marketplaces by conditioning the subsidies on that, but the administration says that’s a rewrite of history. Kagan said that without the subsidies, the marketplaces are rendered essentially useless.
“You’re essentially setting up a system in which these federal exchanges [will have] no customers and in fact there will be no products,” she said.
The case is the biggest legal challenge to the healthcare law since 2012, when the court ruled most of the Affordable Care Act is constitutional but said states may reject its offer of Medicaid expansion.
This story was first published at 11:53 a.m. and has been updated.
