Enter David King, Douglas Hurst, Brenda Levy, and Rose Luck, the nitpicker plaintiffs in the case King v. Burwell, which is the latest legal challenge to the Affordable Care Act (aka "ObamaCare").
When ObamaCare passed in 2010, one of the things that it did in order to make sure that as many people as possible get health coverage was to set up health care exchanges where people can go on-line and shop around for the best deal for health insurance. Because the federal government cannot force state governments to implement federal statutes, the law properly gave the states the option of setting up their own health care exchange in 2014 or, in the alternative, allowing the federal government to set up an exchange on behalf of a state (or in partnership with a state) if a state chose not to do so on its own. You with me so far? When 2014 rolled around, 26 states chose not to set up their own exchanges and instead left it to the federal government to set up exchanges for their citizens. This would probably be a good place to note that of the 26 states that declined to set up exchanges, 24 of the 26 states are run by Republican governors. Similarly, of the 24 states that either set up their own exchanges or partnered with the federal government to set up a state-federal hybrid exchange, 20 of the 24 states are run by Democratic or Independent governors. This can hardly be characterized as a coincidence.
Turning our attention back to the exchanges, once an exchange is set up either by a state or by the federal government, the federal government provides health insurance subsidies to help lower the cost of health insurance for the people in all 50 states.
So what is the problem here? Well, according to the plaintiffs, the language in the ObamaCare law says that the tax-credit subsidies are limited to people living where a health insurance marketplace, known as an exchange, has been “established by the state.” They are reading those four words "established by the state" to literally mean that a state government -- and not the federal government -- must have established the exchange in order for people to receive a subsidy to lower their insurance costs. In other words, 7.5 million people who purchase their health insurance in the 26 states that opted out of establishing their own state-sponsored exchanges are not suppose to receive a tax subsidy from the federal government. Talk about nitpicking.
Ironically, the lead plaintiff, David King, a 64-year-old Vietnam veteran and resident of Fredericksburg, Virginia, is arguing to eliminate the subsidy but he would not be able to afford the health insurance that he receives on the federal exchange without the federal government's subsidy (Virginia is one of the states that declined to set up an exchange; see map above). King works as a limo driver and makes $39,000 a year. Based on his income, King would have to pay $648 a month for health insurance without the federal government subsidy, but would only have to pay $275 a month with the subsidy. In other words, David King is literally arguing against his own economic interests. But of course he and the other plaintiffs don't see it that way. According to their logic, if the Supreme Court rules in their favor and ends the tax subsidy for 7.5 million Americans who are currently relying on it to buy heath insurance each month, it will mean the end of ObamaCare, which of course will be a win for conservatives everywhere. (See Plaintiff's legal brief HERE).
Speaking on behalf of the federal government, the Obama Administration argues that the plaintiffs' reading of the four words "established by the state" largely ignores the many other sections of the ObamaCare law which make clear that federal tax subsidies were plainly intended to be issued to residents in all 50 states, regardless of whether a state established an exchange there or not. To further bolster this argument, they point to the absurd result that would occur if the Court adopts the plaintiffs' reading of the law: individuals buying health insurance through a federal exchange would not be eligible for a federal tax credit. (See Federal Government's legal brief HERE).
HOW WILL THE SUPREME COURT RULE?
The Supreme Court heard oral argument on this matter last Wednesday, March 4, 2015. The liberal Justices (Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan) all beat the plaintiffs over the head with questions indicating that the Justices do not agree with the plaintiffs. Likewise, the conservative Justices (Antonin Scalia and Samuel Alito) did the same to the federal government. Conservative Justice Clarence Thomas, who hasn't asked a question from the bench since 2006, sat silently per usual - but we can rest assured that he will side with his conservative brethren. Where it got interesting was with conservative Chief Justice John Roberts, and conservative "swing" Justice Anthony Kennedy.
As you may recall, it was Chief Justice Roberts who voted against his conservative brethren during the first legal challenge to ObamaCare which ultimately led the Court to uphold the law's constitutionality by a 5-4 margin. So all of the experts paid special close attention to what he and "swing" voter Anthony Kennedy had to say during oral arguments last Wednesday. According to one expert:
Anthony Kennedy had asked about “Chevron deference,” a doctrine of law that describes how much leeway the executive branch should have in interpreting laws. Verrilli, not surprisingly, said that the Chevron doctrine gave the Obama Administration more than adequate permission to read the law to allow subsidies on the federal exchange. “If you’re right about Chevron,” Roberts said, at long last, “that would indicate that a subsequent Administration could change that interpretation?” Perhaps it could, Verrilli conceded.
The question suggests a route out of the case for Roberts—and the potential for a victory for the Obama Administration. Roberts came of age as a young lawyer in the Reagan Administration, and there he developed a keen appreciation for the breadth of executive power under the Constitution. To limit the Obama Administration in this case would be to threaten the power of all Presidents, which Roberts may be loath to do. But he could vote to uphold Obama’s action in this case with a reminder that a new election is fast approaching, and Obamacare is sure to be a major point of contention between the parties. A decision in favor of Obama here could be a statement that a new President could undo the current President’s interpretation of Obamacare as soon as he (or she) took office in 2017. In other words, the future of Obamacare should be up to the voters, not the justices.