King rul­ing dims ACA foes’ le­gal hopes

Modern Healthcare - - NEWS - By Lisa Schencker

“Congress Af­ford­able Care passed Act theto im­prove health in­sur­ance mar­kets, not to de­stroy them. If at all pos­si­ble, we must in­ter­pret the act in a way that is con­sis­tent with the for­mer, and avoids the lat­ter.”


The U.S. Supreme Court’s 6-3 de­ci­sion up­hold­ing pre­mium sub­si­dies for Amer­i­cans in all states puts to rest months of fret­ting over the im­me­di­ate fu­ture of the Af­ford­able Care Act. While it doesn’t nec­es­sar­ily drive a stake through the heart of all anti-Oba­macare lit­i­ga­tion, le­gal ex­perts agreed it does send a dis­cour­ag­ing mes­sage to the law’s le­gal foes.

Last week’s de­ci­sion in King v. Bur­well should be a “big hint” to ACA chal­lengers that the Supreme Court is not go­ing to tol­er­ate at­tempts to use the courts to change the law, said El­iz­a­beth Wy­dra, chief coun­sel for the lib­eral Con­sti­tu­tional Ac­count­abil­ity Cen­ter. The strength of the ma­jor­ity opin­ion should be a sig­nal to ACA op­po­nents that they need to work through the po­lit­i­cal process, she said.

Even some op­po­nents of the law ex­pressed pes­simism about rolling it back through the courts.

“We’re kind of on the down­ward spi­ral,” said Hans von Spakovsky, a se­nior le­gal fel­low at the con­ser­va­tive Her­itage Foun­da­tion. Any big changes in the law, likely will have to wait un­til vot­ers elect a Repub­li­can pres­i­dent, he added.

Still, the King rul­ing isn’t the end of the line for Oba­macare foes seek­ing to hob­ble the ACA through the courts.

The high court ma­jor­ity, led by Chief Jus­tice John Roberts, held that the law read in its en­tirety was clear in al­low­ing Amer­i­cans in all states to re­ceive the sub­si­dies. The ma­jor­ity re­jected the plain­tiffs’ nar­row fo­cus on a sec­tion of the law stat­ing that sub­si­dies are avail­able only to those who en­roll through “an ex­change es­tab­lished by the state.”

“Congress passed the Af­ford­able Care Act to im­prove health in­sur­ance mar­kets, not to de­stroy them,” Roberts wrote in the opin­ion. “If at all pos­si­ble, we must in­ter­pret the act in a way that is con­sis­tent with the for­mer, and avoids the lat­ter.”

The jus­tices de­clined to find the law’s word­ing am­bigu­ous as grounds for up­hold­ing the sub­si­dies un­der the court’s Chevron doc­trine of de­fer­ring to ad­min­is­tra­tive dis­cre­tion when a statute is un­clear. Such rea­son­ing would have left the mat­ter of sub­si­dies open to re-in­ter­pre­ta­tion by fu­ture pres­i­den­tial ad­min­is­tra­tions.

If the court had ruled against the Obama ad­min­is­tra­tion, an es­ti­mated 6.4 mil­lion Amer­i­cans in at least 34 states would have lost their sub­si­dies, mak­ing cov­er­age un­af­ford­able for many of them and throw­ing the en­tire in­di­vid­ual in­sur­ance mar­ket into tur­moil.

A dis­sent­ing opin­ion writ­ten by Jus­tice An­tonin Scalia and joined by Jus­tices Sa­muel Al­ito and Clarence Thomas crit­i­cized the ma­jor­ity for per­form­ing “som­er­saults of statu­tory in­ter­pre­ta­tion.” Scalia wrote that the phrase “es­tab­lished by the state” is clear and should disal­low sub­si­dies through the fed­eral ex­change.

“Words no longer have mean­ing if an ex­change that is not es­tab­lished by a state is ‘es­tab­lished by the state,’ ” he wrote.

Fol­low­ing the rul­ing, Pres­i­dent Barack Obama said that the Af­ford­able Care Act is “here to stay.” Obama said healthcare is a right of all Amer­i­cans, draw­ing par­al­lels be­tween the ACA, So­cial Se­cu­rity and Medi­care. “We chose to write a new chap­ter,” he said. “If we get sick, we’ll be able to still look af­ter our fam­i­lies ... This was a good day for Amer­ica. Let’s get back to work.”

But Wis­con­sin Gov. Scott Walker, a lead­ing Repub­li­can pres­i­den­tial hope­ful, said the rul­ing means con­gres­sional Repub­li­cans must “re­dou­ble their ef­forts to re­peal and re­place” the law.

In con­trast, Michigan’s Repub­li­can gover­nor, Rick Sny­der, said he ap­pre­ci­ates that the court re­solved the “deep un­cer­tainty” of the is­sue in his state, which uses the fed­eral ex­change.

Still, there are other pend­ing court chal­lenges to the healthcare re­form law.

A fed­eral dis­trict judge in Washington is con­sid­er­ing a law­suit filed by House Repub­li­cans ar­gu­ing that the Obama ad­min­is­tra­tion is spend­ing $175 bil­lion that Congress never ap­pro­pri­ated for the ACA’s cost-shar­ing pro­vi­sions. Those pro­vi­sions of­fer lower-in­come ex­change plan mem­bers re­duced de­ductibles, co­pays and coin­sur­ance.

The Obama ad­min­is­tra­tion says the House Repub­li­cans lack le­gal stand­ing to bring the suit be­cause they were not in­jured by the ad­min­is­tra­tion’s ac­tions. Le­gal ex­perts say it could be dif­fi­cult for House mem­bers to achieve

stand­ing be­cause of Supreme Court prece­dent against bring­ing po­lit­i­cal dis­putes to court. But if the plain­tiffs can get past the stand­ing is­sue, their sub­stan­tive ar­gu­ments stand a chance of suc­cess, ex­perts say.

Dur­ing a hear­ing on the stand­ing is­sue last month, Judge Rose­mary Col­lyer, a Ge­orge W. Bush nom­i­nee, ap­peared highly skep­ti­cal of the ad­min­is­tra­tion’s ar­gu­ments against grant­ing the plain­tiffs stand­ing, and she asked both sides for ad­di­tional doc­u­men­ta­tion.

Ni­cholas Ba­gley, an as­sis­tant pro­fes­sor of law at the Univer­sity of Michigan, called the House law­suit the “big­gest wild­card” when it comes to the ACA’s fu­ture in the courts. “The elim­i­na­tion of the cost-shar­ing sub­si­dies would be a sub­stan­tial blow,” he said. “But most le­gal observers, in­clud­ing me, think the House doesn’t have stand­ing to chal­lenge the ad­min­is­tra­tion’s de­ci­sion.”

Other le­gal observers say two other cases pose a po­ten­tially se­ri­ous threat to the ACA. The plain­tiffs in those cases say the ACA is un­con­sti­tu­tional be­cause it is a rev­enue-rais­ing law that should have orig­i­nated in the House rather than the Se­nate. Democrats say the bill did orig­i­nate in the House as a dif­fer­ent mea­sure. Ap­pel­late pan­els have dis­missed those cases. The plain­tiffs have asked the full ap­peals courts to re­hear them.

Some diehard Oba­macare foes pre­dict le­gal chal­lenges will con­tinue. “I don’t think plans of chal­leng­ing var­i­ous as­pects of Oba­macare end with this ( King) de­ci­sion,” said Josh Blackman, an as­sis­tant pro­fes­sor at South Texas Col­lege of Law who filed an ami­cus brief in the case on be­half of the Cato In­sti­tute sup­port­ing the King plain­tiffs. He said the law will face new scru­tiny af­ter the next pres­i­dent takes of­fice and other pro­vi­sions of the law, such as the “Cadil­lac plan” tax—a 40% tax on high-cost em­ployer health plans—go into ef­fect.

But Ankur Goel, a part­ner with McDer­mott Will & Emery who coau­thored an ami­cus brief in sup­port of the ad­min­is­tra­tion in the King case, said it will be more dif­fi­cult for Oba­macare foes to win their cases in the wake of the King rul­ing. “I’m not quite ready to say this is the last,” he said. “But I do think the longer the Af­ford­able Care Act is in place and op­er­at­ing, and the more en­trenched it be­comes, that af­fects how suc­cess­ful court chal­lenges (will be).”


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