On March 4 the Supreme Court heard oral arguments in King v. Burwell. A ruling is expected in late June – though it’s possible it could come earlier. The plaintiffs argue that the health insurance subsidies should only be available to people living in states running their own Affordable Care Act health insurance exchanges or marketplaces, not the 34 states using the federal exchange via HealthCare.gov. They cite four words in the text of the law “established by the state” to make this argument. The Administration says it’s clear from reading the full text of the 906 page law that subsidies were to be available in all 50 states, no matter what kind of exchange they have.
So the Supreme Court has heard the King v. Burwell challenge to the Affordable Care Act.
Much of the coverage suggested that the March 4 oral arguments seemed to favor the administration, particularly because Justice Anthony Kennedy, often the deciding swing vote on the court, asked some questions showing skepticism of the plaintiff’s case.
But all that tells is precisely that – he asked some questions showing skepticism. He won’t necessarily vote that way. He backed scrapping the entire statute back in 2012 and made clear at that time that he detested the law.
Oral arguments are interesting and important – but rarely decisive. If you think you know how the court will rule – well you have a 50-50 chance of being right.
A few things did come out that health journalists should note.
Chief Justice John Roberts – who did uphold the law in his historic 2012 ruling but who is certainly no fan of it – was uncharacteristically silent. His one notable comment involved the right of the administration/executive branch to interpret a statute that’s ambiguous. In this case, the IRS has interpreted and implemented the distribution of subsidies (which are technically tax credits, hence the IRS role). It has allowed them in both state and federal exchanges.
Roberts noted that the next administration would also be able to interpret the statute – and could decide to do so quite differently. That may be – may be – a hint that he will come down on the side of upholding the law and letting the political system, not the judiciary, work it out in the future. But again, we just don’t know.
Justice Antonin Scalia – in everybody’s favorite moment – suggested Congress could fix it. “This Congress?” asked a bemused Solicitor General Don Verrilli.
And Justice Samuel Alito suggested a possible “stay” until the end of the tax year, which would give the states and the Department of Health and Human Services time to work something out (if the states had interest in doing so; some Republican governors and legislatures will not). That’s something state-based reporters need to keep track of:
- What’s the pressure point – would your governors feel the need to come up with a solution if his/her constituents lost subsidies?
- Would it be in an ACA framework?
- What will the health care providers and the health plans do to pressure them?
NOTE: Some legal observers doubt a stay is likely. If the court rules subsidies are illegal, how do they justify allowing them to persist for six or so more months?
Another angle that came up but didn’t get that much attention in the press: Medicaid Maintenance of Effort (MOE).
When the Affordable Care Act passed in 2010, states were required to keep intact their adult Medicaid eligibility. More specifically, they could make it more generous but they couldn’t make it more restrictive. They had to “maintain their effort” – keep doing, at least, what they had been doing. (This was eligibility – it didn’t affect all fees or benefits). They had to keep this floor until the exchange was established on Jan 1, 2014.
The catch – and what’s relevant to the King case – is that the language said they had to do MOE until an exchange was established by the state. So if the King argument prevails, the states that didn’t create exchanges are still bound – and will be bound indefinitely unless Congress intervenes – to their 2010 eligibility rules. They would never be able to change their enrollment. And if they did – they’d lose ALL of their federal Medicaid funding.
We have a tip sheet (updated with a link to the oral arguments) that can guide your coverage through the ruling, which is expected in late June.