Reform case may hinge on precedent
How the U.S. Supreme Court rules in the King v. Burwell case challenging the healthcare reform law could come down to one word: Chevron.
Experts agree that the justices must consider the high court’s precedent in the 1984 case Chevron USA v. Natural Resources Defense Council. The pending case centers on whether the reform law’s language allows federal premium subsidies in states that have not “established” their own insurance exchanges and rely on the federal exchange.
If the tax credits are held illegal in the 34 states using the federal exchange, millions of Americans likely would no longer be able to afford their insurance, roiling the law’s coverage expansion and insurance reforms.
Several lower courts, including the 4th U.S. Circuit Court of Appeals, have found the law’s language ambiguous and applied the Chevron doctrine, which requires deferring to the Internal Revenue Service’s regulatory interpretation of the law allowing the subsidies.
Most experts say if the justices apply Chevron, the subsidies survive. “I think the justices who want to affirm the 4th Circuit will invoke the Chevron deference, and those who want to reverse (it) will ignore it,” said Erwin Chemerinsky, dean of the University of California Irvine School of Law. “There’s no doubt the Chevron deference works in favor of the IRS.”
But Michael Cannon, director of health policy studies at the libertarian Cato Institute and a key mover behind the legal challenge, argued that “if you apply the Chevron doctrine, the plaintiffs win” because the law is not ambiguous.
Abbe Gluck, a Yale law professor, said the Affordable Care Act, when read in context, is clear in allowing subsidies in all states. “If this case was about anything other than Obamacare, it would be a very clear Chevron case,” she said.
Noah Feldman, a Harvard law professor, said the justices’ potential decision this term on same-sex marriage might unconsciously influence their decision in King v. Burwell. If the court rules in favor of same-sex marriage, that might give Chief Justice John Roberts—widely expected to be the swing vote in King— the political cover he needs to vote down the premium subsidies. It would be difficult to accuse the court of being overtly political if it votes in favor of gay marriage and against healthcare reform, he said.