More than four years ago, lawyers and political analysts who thought Congress had made a huge mistake in enacting the new health care law were scouring the law in search of weaknesses that could be attacked with devastating effect. That law, said political activist Michael Greve at the time, “has to be killed as a matter of political hygiene. I do not care how this is done.”
With a painstaking search in the nearly 1,000-page Affordable Care Act, the challengers came up with a four-word phrase that spells out how a system of subsidies to help people afford health insurance would operate. The money would be available only for consumers who shopped for a policy on a marketplace (or “exchange”) that had been “established by the state.”
Now, the targeting of that phrase has reached the point that, depending upon how the Supreme Court interprets those words, could essentially spell doom not only for the subsidy system, but perhaps the entire Act. That, of course, was the ultimate political, as well as legal, objective of the challengers.
On Wednesday, the Supreme Court held a hearing to focus on that phrase, and to debate how to interpret what Congress meant by the words. As the challengers’ lawyer said in his opening remark, “This is a straightforward case of statutory construction.”
Should the phrase mean that subsidies are available only in 16 states that did establish their own insurance exchanges – not enough to make the system economically viable -- or did it mean that this financial assistance was to be available also in the 34 states that refused to create an exchange of their own, leading the federal government to set up such a marketplace and thus creating a nationwide insurance pool that will provide health insurance at affordable rates?
It was immediately clear on Wednesday, as already expected, that the court’s four most liberal Justices would vote to make the subsidy system nationwide, to keep ACA alive and fully functioning.
That meant that only a fifth vote need be found to carry the day for the federal government’s view, and for the ACA itself. From other indications at the hearing, it seemed that the deciding vote would have to come from Chief Justice John G. Roberts, Jr., or Justice Anthony M. Kennedy. (That is, there seemed little chance that support for salvaging the ACA would come from the court’s most conservative Justices: Samuel A. Alito, Jr., Antonin Scalia, or Clarence Thomas.)
The Chief Justice said very little, keeping any inclinations that he has to himself. So, as is so often the case, the fate of the ACA seemed to come down to the reaction of Justice Anthony M. Kennedy. And thereby began a transformation of the case of King v. Burwell from one about what Congress had in mind in choosing four words in a statute, to what the Constitution allows Congress to do when it seeks to enlist state governments to take part in a federal program or activity.
In the modern era, the Supreme Court has been acting as a protective guardian of the prerogatives of the states, and the court has no more protective member in that context than Justice Kennedy. He treats the federal structure – the national and state division of government power – as a matter of basic constitutional faith, and he regards it almost as a personal mission to keep that in what he calls “balance.” There has been a “federalism revolution” in the court in modern times, and Kennedy is one of its prime movers.
Kennedy is a firm supporter of the idea, expressed by the court some years ago, that “it is incumbent upon the federal courts to be certain of Congress’ intent before finding that a federal law overrides the usual constitutional balance of federal and state powers.”
Some of the architects and other supporters of the ACA had hoped that a federalism argument could be made that would attract Kennedy. Wednesday’s hearing demonstrated that the effort had succeeded.
The event had gone on for only a few minutes when Kennedy made his first comment, directing it to the lawyer representing the challengers who oppose a nationwide ACA subsidy system. Here is exactly what the Justice said: “Let me say that, from the standpoint of the dynamics of federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the states are being told either create your own exchange, or we’ll send your insurance market into a death spiral. We’ll have people pay mandated taxes which will not get any credit on the subsidies. The cost of insurance will be sky-high. But this is not coercion?”
That was a perfect recital of the economic calamity that the ACA’s supporters, including President Obama himself, have been foreseeing if the court were to rule against the government on the scope of the insurance subsidy system. But, most importantly, Kennedy was phrasing it in terms of forcing the states into what he obviously perceived as a no-win choice, and that runs directly counter to his perception of the dignity of the states.
As the hearing wore on, there seemed to emerge the shape of what Kennedy might help lead the court to decide: whatever the meaning of the four words Congress had chosen in creating the subsidy system, enforcing it in the way that the challengers want would punish the states in a way that probably is unconstitutional. Kennedy reminded everyone that courts have a duty, besides the one to protect the states, to avoid constitutional decisions until that becomes necessary, so if you can, you read a law passed by Congress in a way that will allow it to withstand the constitutional doubt surrounding it.
Kennedy conceded that the court did not have the power to simply rewrite the law to save its validity, but the thrust of his several remarks was that it is within the court’s power to accept a plausible reading of such a law if that is the way to avoid having it violate the Constitution.
If, in the weeks and months that the court will now spend privately debating how to rule on this latest ACA case, Kennedy retains his constitutional doubts and persuades others to go along with him, the controversial health-care law may again survive a near-death experience.
