Supreme Court Upholds Affordable Care Act Again

The Supreme Court upheld the Affordable Care Act (ACA) against another significant legal challenge this week, sending a resounding message to opponents of the law that judicial system will not be the vehicle to overturn it.  In a 6 – 3 opinion, the Justices ruled that the IRS is permitted to establish tax subsidies in every state, not just ones that set up specific healthcare exchanges, allowing the 6.4 million people who are receiving subsidies through federal healthcare exchanges to keep their coverage.

King v Burwell Challenges Congressional Intent in ACA Language

Specifically at issue in King v Burwell was language in the ACA which authorized the IRS to provide tax credits for those who buy health insurance on marketplaces that are, in the words of the law, “established by the state.”  Challengers to the law argued that “established by the state” meant exactly what it reads – the IRS was only allowed to provide tax credits if the healthcare marketplace had been established by a state.  In defense of the law, the Government responded that “established by the state” also included federal health insurance marketplaces which have been used to accommodate residents of the 34 states that have refused to set up their own local exchanges.

While the debate was focused on just one sentence of a massive piece of legislation, the issue proved to be critical because the IRS tax credits are a key mechanism through which the Government is able to provide the subsidized health insurance that the ACA was established to offer.  If the challenge to the provision “established by the state” successfully limited IRS tax credits to only state exchanges, then Americans in 34 states who purchased their insurance coverage on a federal exchange would not have been eligible to receive their subsidized healthcare packages.

With the future of Obamacare at stake, Chief Justice John Roberts and Justice Anthony Kennedy joined with the Court’s liberal bloc to determine that Congress’s intent was to provide affordable health insurance markets for all Americans, and, while the phrasing was admittedly clunky, federal exchanges came under the umbrella of the phrase “established by the state.”

Supreme Court Upholds Obamacare Again

Delivering the majority opinion, Chief Justice John Roberts directed the bulk of his argument on the overall purpose of the Affordable Care Act rather than the details of its language.  Chief Justice Roberts emphasized that Congressional intent was the driving factor in the Court’s decision, writing, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible we must interpret the Act in a way that is consistent with the former, and avoids the latter.” Pointing out that a firm interpretation of “established by the state” which eliminates federal exchanges would effectively scuttle administration of the ACA, Roberts and the rest of the majority refused to dismantle the legislation based on literal and textual constructs.

The Chief Justice was not withholding of his criticism of the language of the ACA, calling the law an example of “in-artful drafting” and acknowledging that the term “established by the state” was ambiguous.  However, the Court was not willing to allow these textual concerns to derail President Obama’s signature piece of healthcare legislation.  The President praised the ruling, telling his supporters that the Court’s latest affirmation of the legislation proves that the ACA is not going anywhere and will continue to provide Americans with the opportunity to purchase affordable care even if they live in a state that has refused to establish an insurance exchange.

Not everyone appreciated the decision, and leading the charge of opposition to the majority’s holding was Justice Antonin Scalia who wrote a blistering and colorful dissent that criticized the Chief Justice for rewriting the ACA to ensure it would survive despite its statutory flaws.

Justice Scalia Offers Scathing Dissent of ACA Decision

In a 21-page dissent, Justice Antonin Scalia delivered a harsh criticism of the majority decision, and offered another in a long line of classic and artful dissents by the leader of the Court’s conservative bloc.  At the focus of Scalia’s ire was Roberts’ apparent willingness to continuously reshape the ACA in order to accommodate for the gaps in the hastily written, and barely read, bill.  Referring to the combined three times that Roberts has interpreted the ACA favorable to its ongoing existence, Scalia suggested that the Court’s involvement justifies calling the law “SCOTUScare,” and accused the Chief Justice of stepping outside the boundaries of established legal precedent in order to preserve the law.

After calling the majority’s reasoning and interpretation “pure applesauce” and an example of “interpretive jiggery-pokery,” Scalia concluded his argument, “[T]he cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites. I dissent."  While Obamacare has survived its third, and likely last, significant legal challenge, the ACA will face a perhaps tougher test when voters take to the polls in 2016 when a Republican challenger to the White House will certainly promise a complete restructuring of the controversial legislation.

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