Re­form case may hinge on prece­dent

Modern Healthcare - - NEWS - By Lisa Schencker

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.

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