Friday, March 6, 2015

Supreme Court Hears Argument on ACA Exchanges

In National Federation of Independent Business v. Sebelius, 132 Sup.Ct. 2566 (2012) the United States Supreme Court by a 5-4 vote upheld the individual mandate provisions of the Patient Protection and Affordable Care Act (the “ACA” or “Obamacare”) as a constitutional exercise of the taxing power of Congress.  On March 4, 2015, the Supreme Court heard oral argument in King v. Burwell, a case challenging the legality of the subsidies (premium tax credits and cost-sharing subsidies) that are currently available to people who purchase insurance through insurance marketplaces, or exchanges, whether those marketplaces were established by the federal government, by a state, or by means of a federal-state partnership.
The law says, quite simply, that such subsidies are available through exchanges “established by the state”.  The challenge in King v. Burwell is based on a strict interpretation of the statute and contends that subsidies provided for insurance purchased through federally-established exchanges are not permitted by the express language of the ACA.  The federal government contends, on the other hand, that the intent of Congress in setting up the exchanges and providing for subsidies must be derived from the statute as a whole, rather than just from the specific provision cited by the appellants.

King v. Burwell reached the Supreme Court on writ of certiorari from a panel of the United States Court of Appeals for the Fourth Circuit, which had unanimously supported the legality of the subsidies.  On the other hand, a panel of the D.C. Circuit Court of Appeals in a companion case had previously ruled, by a 2-1 vote, that a strict reading of the statute will not support the government’s right to provide subsidies through federally-operated exchanges.

Most commentators predict that the case will be decided by a close vote.  The four conservative justices – Scalia, Alito, Kennedy, and Thomas – seem likely to support the challenge.  The four liberal justices – Breyer, Ginsburg, Sotomayor, and Kagan – appear to be in support of the government’s position.  It will surprise no one if it turns out that the decision rests, as it did in the Sebelius case in 2012, with Chief Justice Roberts.  Forbes, for one, predicts that the Roberts swing vote once again will support the government’s position.  Whether that prediction is accurate remains to be seen.