Thursday, March 5, 2015

The Obamacare Supreme Court Subsidy Challenge––Surprising Comments From Anthony Kennedy and Maybe a Way Out for John Roberts

The Supreme Court heard oral arguments yesterday in the King v. Burwell case that would throw out the Obamacare subsidies for millions of people now receiving them in the federally run health insurance exchanges.

It sure sounded like perennial swing vote Justice Anthony Kennedy is ready to save the subsidies and Obamacare given his comments suggesting a finding for the plaintiffs would end up coercing the states into building an insurance exchange––something that would present Kennedy with a "serious constitutional problem."

But I was also struck by this line in a Washington Post article about the oral arguments: "More than the other justices, Kennedy is the one most likely to think out loud during oral arguments, trying out various theories and posing quandaries for lawyers."

Translated: It ain't over til it's over.

At one point, conservative Justice Samuel Alito asked if perhaps the Court could delay the effect of a ruling ending the subsidies thereby giving the Congress and the states time to remedy the fallout.
Will this be the tack the conservative Justices will follow to get another perceived swing vote, Chief Justice John Roberts, on their side this time?

Many observers have been wondering out loud, including me, how Roberts would vote to deal Obamacare such a serious blow now when he didn't three years ago in the face of the challenge over the constitutionality of the individual mandate.

By finding for the plaintiffs and then allowing a substantial period before the ruling takes effect, conservative Justices might argue, either the Congress would have time to fix the problem or states would have the time to decide whether or not to set up an exchange and keep the subsidies for their residents.

So, the conservatives would argue, Roberts would have the opportunity to vote with the conservatives and craft a way for the elected representatives to avoid any catastrophic outcome. His Court would not be responsible for causing a major insurance market mess and he would have voted for a judicial outcome that followed the plain text of the law.

As a practical matter, having just watched the House Republican fiasco over holding up funding for the Department of Homeland Security as a means of reversing Obama's recent actions for illegal residents––that resulted in Republican leaders having to heavily rely on Democratic votes to bail them out, giving this Congress time to agree with Obama on fixing Obamacare would likely be a fools errand.

But many state legislatures and governors would likely act to quickly do the paperwork––and it wouldn't be much more than simple paperwork––necessary to create a state-based exchange and then contract with the feds to continue running it, without consumers having to lose their subsidies.

And, other states might well not act to remedy the problem––like Florida and Texas that have more than two million Obamacare subsidy eligible residents between them and have legislatures with a history of doing everything they can to undermine Obamacare.

But as the conservative Justices might argue, that is their decision and not something the Court can be held responsible for.

Then there is Justice Kennedy.


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