Healthcare, Statutory Interpretation, and Court Legitimacy

By Gordon Hull

The Affordable Care Act was in the Supreme Court again today, this time for oral argument in King v. Burwell.  For those who don’t follow the ACA’s legal woes, the challenge in Burwell is this: under the ACA, states are supposed to establish exchanges where citizens can purchase healthcare on the individual market.  For states that don’t want to run their own exchanges, the federal government steps up and does it for them.  Healthcare is expensive, and so the federal government heavily subsidizes the premiums (on a sliding scale) for those in the middle class.  However, buried in the part of the law to do with tax code, the statute says that subsidies are available for those purchasing from an exchange “established by the state.”  The challenge is basically a big, fat gotcha! moment. If you say you’ll pay me back for “dinner,” and I show up with pizza and beer, then I can plausibly expect you to pay me back for both.  On the other hand, if you say that you will pay me back for buying you a pizza, then I should understand that you don’t have to pay me back for beer.  By the same reasoning, if the law says subsidies flow to those whose exchanges are established by “the state,” then those subsidies are not available to those whose exchanges are established by “the federal government.” Gotcha!

Despite the analogy to pizza and beer (you’ll need the beer if you keep up with litigation around the ACA; trust me!), this is almost certainly a terrible argument because it flies in the face of pretty much every theory of statutory interpretation. For the sake of argument, let’s concede that these words are ambiguous (I read a lot of political philosophy: it took me a minute to read the challenge correctly, because “state” just means “government” to me).  When statutory language is ambiguous, you’re supposed to try to read them in the context of what the rest of the 1000+ page document is doing.  You know, to make it coherent.  If the challenge is correct, and people living in states running federal exchanges lose their subsidies, then 6 million or so people will lose their subsidies.  This will make their health coverage unaffordable, or at least so expensive that they’d pay the penalty rather than buy it.  At that point, the only people who buy the insurance will be those who both have a lot of money and expect to use a lot of health care.  This will collapse the entire individual market (the governmental briefs in the case use the phrase “death spiral”).

So to believe the challenge is to believe that it’s a good idea to read these four words as destroying hundreds of pages of statutory language.  I’ve read my Strauss, but that’s a hard pill to swallow.  Even if you think the statutory language is completely lucid and works as the challengers assert, the challengers themselves say it’s ok to disregard statutory language when the outcome is absurd; as Marty Lederman points out, “it would be absurd, indeed, for Congress to have insisted that HHS to set up such dysfunctional Exchanges, without the tax credits that are crucial to their operation.”

Today at the Court (I’m following Dahlia Lithwick’s account, which, as always, is indispensable, this time in part for its humor), it looked like there were probably five votes to uphold the ACA.  Justice Kennedy seemed to be convinced that the challengers faced a federalism problem of their own making.  Recall that when the Court upheld most of the ACA, they struck down the Medicaid coverage expansion for being too coercive to the states because it gave them an unreasonable bargain: expand Medicaid, or lose all of your Medicaid funding, not just the part that would have come with the expansion.  The challenge in Burwell seems to demand that the ACA be read as saying that states either have to set up exchanges themselves, or their citizens lose subsidies and in fact the entire ACA will go into public collapse in that state.  Surely, Justice Kennedy kept putting to their attorney, they’re urging a reading of the law that the Court found unconstitutional not so long ago? (there’s another serious federalism problem here, which is that if the federal government wants to do something big to the states, they need to offer the states a “clear choice” to debate.  Four buried words do not a clear choice make.)

Justice Roberts was apparently fairly quiet during the proceedings, but I wanted to float here another argument that might matter, to him especially: court legitimacy.  The Court – and the rule of law – function  best when people believe that its decisions are good ones, and based on sound reasoning, and the Supreme Court tends not to get too far ahead of social mores (when it does, there is often a backlash: see the controversy around this book, as well as Justice Ginsburg’s comments on Roe v. Wade).  Respect for the Court also depends on people not viewing its decisions as crassly political, and this is something that concerns Justice Roberts greatly, from his confirmation hearings onward.

Plausible evidence suggests that when the court reaches 5-4 split decisions on deeply partisan issues, it undermines public confidence in those decisions (by alienating those on the losing side). Indeed, this Court is already seen as hopelessly partisan by a lot of people, particularly on the left.  The problem began when the Court overruled Florida’s Supreme Court to stop vote counting in Bush v. Gore; the result was that Bush became president by judicial fiat.  Ronald Dworkin called it “one of the least persuasive Supreme Court opinions that I have ever read,” and he read a lot of Supreme Court opinions.  More recently, Citizens United, which allowed corporations and unions to spend unlimited sums of money in elections, is hated by nearly everyone, especially those on the left, who often view it as a deliberate decision to give conservatives a helping hand in elections.  On the other hand, when Roberts provided the 5^th vote to uphold the ACA, the decision did a lot to up the Court’s legitimacy in the eyes of many observers (see also here).  But then the Court (in an opinion by Justice Alito) then struck down the contraception mandate, in what is hard not to see as an endorsement of the principle that religious conservatives get to control women’s sexuality, in defiance of principles of equal protection.

In such an environment, a decision to overturn a statute as significant and complicated as the ACA on such thin statutory grounds as those provided in Burwell would decimate the Court’s standing among nearly everyone but the very conservative.  Most people would think the decision involved a sudden flip-flop on the Court’s part (didn’t they just uphold Obamacare in 2012?)  The details of the legal arguments would get buried, though Justice Kennedy identified a very specific point of conflict.  Plus, Planned Parenthood v. Casey, the 1992 decision upholding Roe v. Wade, made a sustained appeal to stare decisis, the presumption in favor of preserving precedent unless it is egregiously bad.  Liberals already think the Roberts Court wants to strike the ACA down for political reasons.  The ACA polls poorly, but people like the individual parts when asked about them separately, and everybody loves subsidies: 54% of respondents in one recent poll wanted Congress to fix things if the Court strikes them down.  I think the challenge in Burwell is basically a desperate attempt to throw anything at the wall and hope it sticks, but it seems to me that there may well be a 6^th vote to uphold the subsidies: even if he thinks the balls and strikes are that hard to count here, Justice Roberts might well decide that the damage to the Court as an institution that would follow its killing the subsidies is a tiebreaker.