What’s at stake in the third major Obamacare case before the Supreme Court is pretty simple. But how it’ll be decided is a little more complicated.
In the King v. Burwell arguments on Wednesday, the Obama administration must convince the court that insurance subsidies can go to all the states while the challengers must persuade the court they can’t.
The highly-anticipated case has huge practical implications, because an estimated 13 million Americans could lose insurance subsidies next year if the court upholds the challenge. While the healthcare law contains some provisions aimed at lowering healthcare costs, it mainly relies on subsidizing low and mid-income Americans to make insurance affordable for them.
On Wednesday the justices will be presented with past cases they can draw from to help decide the major questions at stake. Those big questions include: Is the language of the Affordable Care Act clear? And what did Congress intend when passing the law?
The challengers will emphasize the text of the law. When the law says subsidies may be provided through “an exchange established by the state,” that excludes the states using healthcare.gov instead of running their own marketplaces, they say.
The administration, on the other hand, will try to get the justices to focus on the intent of Congress when passing the law and its overall purpose. They’ll argue that lawmakers never intended to limit subsidies only to state-run marketplaces. And they’ll emphasize the subsidies’ crucial role in lowering healthcare costs for some Americans.
Here’s the layperson’s guide to the cases each side is most likely to cite.
Cases the challengers will probably cite:
Chevron USA v. Natural Resources Defense Council (‘Step One’)
Expect to frequently hear the term “Chevron” during arguments, legal experts say.
The 1984 Chevron case came up constantly while King was being argued in the lower courts, and it appears multiple times in the briefs filed by both sides. That’s not surprising, since it’s a landmark case laying out when a government agency gets to interpret a law passed by Congress.
There are two elements of the Chevron decision, referred to as “part one” and “part two.” First, it must be determined that the text of a law is clear; if it is, federal agencies can’t take interpretive freedoms as they implement it. But if the text is ambiguous, then an agency gets more leeway in carrying it out.
If the court stops at “step one” by deciding that the text of the Affordable Care Act is clear, that could end in a win for the challengers, legal experts say.
“Chevron step one is usually seen as more hostile to the government,” said Jonathan Adler, a law professor at Case Western Reserve University who sides with the plaintiffs. “Chevron step two is more favorable to the government.”
Utility Air Regulatory Group v. Environmental Protection Agency
Michigan v. Bay Mills Indian Community
Both sides cite the EPA case in their briefs. But only the challengers cite Michigan v. Bay Mills Indian Community, in which the court said the state of Michigan couldn’t sue the Indian community because of tribal immunity.
In that case, the court said its job isn’t to rewrite defective legislation, said Tom Christina, an attorney with the firm Ogletree Deakins.
“One of the issues the court will need to consider is whether it is willing to try to engage in some interpretive exercise that would come as close as possible to making all the different words and phrases in this very long statute work like the finest clockwork ever designed,” he said.
Cases the Obama administration will probably cite:
Chevron USA v. Natural Resources Defense Council (“Step Two”)
The administration will try hard to get the justices to accept the precedent laid out in Chevron “step two.”
They’ll try to convince the justices that because the language of the law is unclear, the IRS was well within its right to award the subsidies to all 50 states. And “step two” of Chevron — which gives agencies leeway in the case of ambiguously worded laws— appears to support that argument.
“If you took 100 cases of this type at random and applied Chevron to them, you would probably find the government wins more than 50 percent of them,” Christina said.
Adler agrees. “If they get to Chevron step two, the government usually wins,” he said.
Pennhurst State School and Hospital v. Halderman and Gregory v. Ashcroft
These two cases both limit federal authority — but they could end up bolstering the administration’s argument in the end. They’re both cited in the administration’s briefs but aren’t mentioned by the challengers.
In Pennhurst, the justices said federal courts can’t order state officials to comply with state laws, and in the Gregory case, they said federal courts should be certain of Congress’ intent before infringing on state laws with a federal law.
“Those cases say the court will not interpret federal statute to intrude on the states unless it’s crystal clear,” said Abbe Gluck.
And if the justices decide that the healthcare law’s language isn’t crystal clear, they could determine it’s unfair to cut off subsidies to the states relying on healthcare.gov, Adler said.
“The concern is that’s giving states a very difficult choice and it’s not fair to do that to states unless Congress is very clear that that’s what it’s intending to do,” Adler said.
