Earlier this week, President Obama spoke publicly about King v. Burwell, the case pending before the Supreme Court that could potentially upend the entire fiscal structure of the Affordable Care Act by ruling that people who purchase insurance on the Federal exchange are not entitled to income-based subsidies due to the way the law is written:
President Barack Obama expressed deep frustration with the U.S. Supreme Court on Monday, questioning why justices even took up a case that imperils his signature health insurance reform plan.
The high court is set to issue a decision on the case, known as King v. Burwell, by the end of the month. A ruling against the government would mean that 6.4 million people in the 34 states relying on the federal Healthcare.gov website would be at risk of losing subsidies that make their insurance affordable.
“This should be an easy case. Frankly, it probably shouldn’t even have been taken up,” Obama said at a news conference after the G-7 summit in Krun, Germany. “Since we’re going to get a ruling pretty quick, I think it’s important to assume that the Supreme Court’s going to do what legal scholars would expect them to do.”
Obama repeated the administration’s contention that there’s no contingency plan or fix to keep insurance markets from going into a tailspin, predicting that the justices would decide in his favor. And in any case, he added, Congress could fix the ambiguous phrasing of the health law “with a one-sentence provision.”
Senate Republicans quickly shot down that possibility. “Let’s be clear: if the Supreme Court rules against the administration, Congress will not pass a so-called ‘one-sentence’ fake fix,” said Sen. John Barrasso (Wyo.), the Senate’s No. 3 Republican.
Barrasso added, in a statement: “Instead of bullying the Supreme Court, the president should spend his time preparing for the reality that the court may soon rule against his decision to illegally issue tax penalties and subsidies on Americans in two-thirds of the country.”
Obama refused to offer states advice about how to prepare for a ruling against the law. “What I can tell state leaders is that under well-established precedent, there is no reason why the existing exchanges should be overturned through a court case. It has been well documented: Those who passed this legislation never intended for folks who were going through the federal exchange not to have their citizens get subsidies,” he said.
To decide otherwise, Obama said, would be a “twisted interpretation of four words,” a reference to a line in the law about subsidies being available to exchanges “established by the state.” Opponents of the Affordable Care Act have used those words to argue that subsidies can go only to customers of state-run marketplaces, not to those who use the federal exchange on Healthcare.gov
President Obama’s comments unsurprisingly drew criticism from Republicans and other opponents of the Affordable Care Act, many of whom who accused him of essentially trying to intimidate the Supreme Court Justices in the same way they made similar accusations during the wait for a decision on the 2012 lawsuit challenging the constitutionality of the entire PPACA. For example, Michael Cannon has characterized the President’s remarks as ‘pounding the table,’ and said that the comments were evidence of the same ideological fervor he displayed in pushing the law through Congress five years ago. The responses from Republicans on Capitol Hill were largely similar with, again, many accusing the President of essentially trying to blackmail the court , while the White House has retorted that the President’s comments were directed at Congress, which would be required to consider what to do if the Court does rule in favor of the Plaintiffs in King.
It is true that a victory for the Plaintiffs in King would likely put Congress in a difficult political position. Unless something is done, the decision will mean that approximately four million people who currently get insurance through Healthcare.gov would likely face massive increases in their out-of-pocket expenses due to the end of subsidies. This, in turn, would likely mean that many people will either be faced with serious cash flow problems or they will drop insurance altogether, a possibility that raises the risk that everyone’s premiums will go up as the risk pool decreases. Polling has generally found that the American public wants the Court to uphold the subsidies and, if there is an adverse ruling, they want Congress to do something about it. Because of this, and the fear that they may actually win this case, many Republicans in the House and Senate have been working in public and behind the scenes to create a contingency plan for legislation that could be passed in the wake of the Court’s decision. At the very least, most forms of this legislation would authorize the subsidies to be continued at least through 2017 to get past the election and allow the new President and Congress to come up with a solution. At the same time, though, the hardcore base of the Republican Party remains strongly opposed to anything that would be perceived as “saving” the PPACA in the event of a win at the Supreme Court. Because of this, many analysts have suggested, persuasively, that the Republican Party stands to lose big if the Court strikes down Federal subsidies.
All of this will be moot, of course, if the Court upholds the subsidies by interpreting the PPACA’s language in a way that allows it. Indeed, most of the Federal Court’s that have heard this issue have done just that, the exceptions being a panel of the Circuit Court of Appeals for the District of Columbia, but that decision was nullified when the full Circuit Court accepted the case for an en banc appeal just before the Supreme Court accepted the King case for review. In that regard it’s worth noting that the Justices seemed divided during oral argument in this case, but most observers seemed to conclude that the Federal Government’s prospects looked rather good at the end of the day. If the Justices rule the other way, though, and the subsidies die for Federal exchange customers, then the political battle over Obamacare will heat up yet again.
