(Photo: http://www.supremecourt.gov)

Yesterday morning the United States Supreme Court handed down its decision in King v. Burwell.

This case is about tax credits granted under the Affordable Care Act (ACA, a.k.a. Obamacare) to low income individuals to help them pay for their health insurance premiums.

You can find the Court’s written opinion here. (For a guide to reading Supreme Court decisions, see my earlier post here.)

The case hinges on the interpretation of the phrase, “an Exchange established by the State.” Specifically, the Court had to decide whether individuals who enroll in a health care plan through the Federal Exchange are eligible for tax credits, or whether those tax credits are available only to individuals who enroll in a plan purchased on “an Exchange established by the State.”

It seems like a petty detail, but at stake are the health care subsidies for an estimated 6.3 million people, and possibly the financial soundness of the whole individual health insurance market.

The Court decided 6-3 in favor of allowing tax credits to all individuals, regardless of whether they enrolled in a health care plan through a Federal or a State exchange. Chief Justice John Roberts wrote the majority decision.

Structurally, the opinion is divided into two sections. Section I is mainly background. It covers a) the history of health insurance reform in the US, b) some of the key provisions of the Affordable Care Act, c) the tax credit provisions of the Act, and d) the history of this specific case.

Section II is the meat of the decision. It first tackles the question of whether the phrase “an Exchange established by the State” can be interpreted unambiguously. After six pages of closely reasoned legal argument, it concludes no, the wording in not unambiguous. Then it presents the majority’s decision on how the text should be interpreted.

As I see it, the Court split between those who favored a literal interpretation of the statute and the majority who took a broader view that, “… the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”

Here, the statutory scheme compels us to reject petitioners’ interpretation because it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very “death spirals” that Congress designed the Act to avoid. [p. 21]

In other words, if you take the narrow, literal view of the text, you cause the health insurance market to collapse which cannot possibly have been Congress’ intent.

Unsolicited Feedback

I think the Court reached a very sensible decision here, even if, as it says, the text is an example of “inartful drafting.”

I also think the outcome was pretty much a foregone conclusion. Given that the Chief Justice had cast the deciding vote to uphold the individual mandate provisions of the ACA in 2012, it seemed highly unlikely that he would turn around and torpedo the Act on much less substantial grounds here. That Justice Kennedy joined the majority in this case was a pleasant surprise.

And hey, everyone’s a winner!

The most important winners here are the millions of Americans who depend on subsidies to help pay for their health insurance plans.

Of course, President Obama wins a huge victory. His signature legislative achievement is, as he says, “here to stay.”

Even the Republicans are winners, as unlikely as that may seem. Many have noted that the Supreme Court rescued the GOP from a nasty mess. Voters would most likely have been blamed them if the court had ruled the other way and eliminated health insurance tax credits. Republicans would have had to scramble to implement some mechanism to prevent millions from losing their health care coverage – most of whom live in red states.

But I think the Court has also saved the collective butts of the 2016 GOP presidential candidates. With the ACA left intact, they can continue on their merry way, ranting about Obamacare, vowing to repeal it, without having to put forward any concrete (let alone credible) proposals, and thus without having to risk being torn to shreds in a feeding frenzy by their own Republican opponents. In other words, Obamacare will not be a significant issue in the GOP nomination fight.

And that means health care will mostly be off the table in the 2016 general election too. Oh sure, the Republican nominee will make dutiful noises to the party faithful about repeal, but again won’t dare make an alternative proposal for fear of alienating their base. But he (definitely a he) won’t be too vocal about it because increasing numbers of voters either depend on Obamacare or favor specific provisions of the law. And the Democratic nominee (a she) only needs to promise to preserve it without having to defend its more unpopular aspects.

So thanks to the Supreme Court, health care will not be a major issue in the 2016 election. You read it here first!

Links

Here are a couple of posts about the case from SCOTUSBlog:

• Court backs Obama administration on health-care subsidies: In Plain English – http://www.scotusblog.com/2015/06/court-backs-obama-administration-on-health-care-subsidies-in-plain-english/#sthash.EZ9dCSLz.dpuf
• Symposium: Words still have meaning – http://www.scotusblog.com/2015/06/symposium-words-still-have-meaning/