Court backs Obamacare subsidies: Legislation from the bench?

Chief Justice Roberts led the majority to uphold ACA subsidies on federal exchanges. Was this an opinion crafted to a result?

The Supreme Court (Flickr/Mark Fischer)

WASHINGTON, June 25, 2015 – The Supreme Court released its opinion on Affordable Care Act (Obamacare) subsidies today, ruling 6-3 in favor of the subsidies.

Court watchers thought that the decision in King v. Burwell had an even chance of going either way. Had the court ruled for the plaintiffs, Obamacare would have been mortally damaged. Now it is clear that opponents can only kill or chip away at it by legislative means.

Obamacare is a tripod; it rests on three legs. The first leg is its rule against limiting health care coverage. Insurers are required to sell coverage to all comers, regardless of current health and pre-existing conditions.

The second is the individual mandate. Because people know that insurance cannot be denied, they might choose not to buy insurance until they need medical care. This would force insurers to raise premiums on everyone to extremely high levels, killing insurance markets. Thus Obamacare requires everyone to buy insurance or pay a penalty.

The third leg is subsidies. Not everyone gets insurance paid for by employers, and for those who don’t, the cost can be very high. The federal subsidies ensure that even the poor can afford health insurance.

In the 2012 case NIFB v. Sebelius, Chief Justice Roberts delivered the opinion for the majority when they ruled 5-4 that the second leg was constitutional. President Obama had pushed Obamacare through partly by insisting that it included no taxes; the individual mandate was emphatically not a tax, but rather an expression of the Constitution’s commerce clause. Roberts ruled that the mandate would not be a legitimate exercise of the commerce clause, but rather that it was legal because it was a tax.

Thus Roberts and the majority upheld Obamacare by rejecting the Obama administration’s reasoning and imposing their own.

King v. Burwell was an attack on the third leg. The argument was that the law clearly said that subsidies could be provided only to people who bought their insurance through a state exchange, hence that federal subsidies were illegal in those states that used the federal exchange.

Both sides argued that the law was clear on this point; opponents argued that the law clearly denied subsidies to people on the federal exchange, while supporters argued that the law clearly intended that those subsidies be provided, and in fact that it would be irrational to craft the law so that they could not be.

Roberts wrote, in an opinion joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan, that, while at first reading the law appears to specifically define “state” as each of the 50 states and the District of Columbia, in larger context the meaning of “state” is unclear. For instance, a provision that says that only someone who “resides in the State that established the Exchange” can buy insurance would mean, under the reasoning of the plaintiffs, that no one in a state without a state exchange could buy insurance, a clearly preposterous conclusion.

Hence Roberts concluded that the phrase “established by the State” is ambiguous. Because Congress intended that anyone who buys insurance on an exchange should be eligible for subsidies, that phrase does not forbid subsidies to people on federal exchanges.

Roberts’ opinion emphasizes the role of Congress in fixing its own laws. It is not the role of the court to void badly written laws, but only to void those that clearly defy the Constitution.

Supporters of the court’s opinion point to a “rule of reason” and to the importance of not throwing large parts of the country into chaos by a too literal reading of the law. The court should avoid decisions that would be hugely disruptive of the status quo without a compelling, constitutionally unimpeachable justification.

Justice Antonin Scalia dissented with Justices Samuel Alito and Clarence Thomas. Scalia’s argument is straightforward: If the words are clear, it is not the job of the court to read the minds of the legislators, but to read the words of the law. And on the basis of the words of the law, subsidies to people on federal exchanges are illegal. This is a riff on Roberts’ opinion; it isn’t the job of the court to save laws that are badly written. That job falls to the legislature.

Critics of Supreme Court opinions often refer to “legislating from the bench.” That phrase as used is vague, meaning essentially, “I don’t like this opinion.” Legislating from the bench is more usefully thought of us deciding on a preferred outcome, then choosing your logic to achieve that result.

Roberts decided NIFB v. Sebelius by rejecting the administration’s logic for the individual mandate and imposing his own. In his opinion on King v. Burwell, he again rejected the administration’s logic and imposed his own. This isn’t, strictly speaking, proof of legislating from the bench, but Roberts was clearly interested in preserving Obamacare and thus was willing to do the administration’s thinking for it.

There is no strong, slam-dunk argument on either side of today’s opinion. Scalia is correct that, if the court decides to interpret words as they please to get the result that they want, then the actual wording of any law is irrelevant in the face of a court that is intent on legislating. The court will always get the result that it wants, and that is dangerous.

Roberts is also correct; the ACA is badly written, filled with contradictions and ambiguities. The proper venue for correcting those is Congress, not the Supreme Court. The language is not as clear as Scalia suggests, and it never is. In any argument over the language of a law, a rule of reason should never be rejected out of hand.

Yet the impression remains, this is not a result determined by dispassionate reading of the law and the Constitution, but rather an opinion that was determined by a predetermined result.

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