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| Supreme Court justices split in key challenge to Obamacare subsidies | Supreme Court justices split in key challenge to Obamacare subsidies |
| (35 minutes later) | |
| Supreme Court justices split along ideological lines Wednesday in questioning during the latest legal battle over the Affordable Care Act, making the outcome difficult to predict. | Supreme Court justices split along ideological lines Wednesday in questioning during the latest legal battle over the Affordable Care Act, making the outcome difficult to predict. |
| Chief Justice John G. Roberts Jr., who saved the act from a constitutional challenge three years ago, this time asked no questions that would betray his thoughts. | Chief Justice John G. Roberts Jr., who saved the act from a constitutional challenge three years ago, this time asked no questions that would betray his thoughts. |
| If there was a reason for optimism for the Obama administration, it came from Justice Anthony M. Kennedy. Kennedy, a potential swing vote, questioned whether the challengers’ reading of the law — that federal tax subsidies should only be available in the 16 states and District of Columbia that have set up their own insurance marketplaces — would cause “serious constitutional problems” of coercion. | |
| [Highlights from oral arguments] | [Highlights from oral arguments] |
| Kennedy told Washington lawyer Michael A. Carvin, representing the challengers, that there was “something very powerful” about the government’s argument that denying subsidies to those in states where federal authorities have set up the exchanges would lead to a host of problems at odds with the goals of the law. | Kennedy told Washington lawyer Michael A. Carvin, representing the challengers, that there was “something very powerful” about the government’s argument that denying subsidies to those in states where federal authorities have set up the exchanges would lead to a host of problems at odds with the goals of the law. |
| At issue in the case — the most serious challenge to the law since the justices upheld it as constitutional in 2012 — is whether millions of Americans who receive tax subsidies to buy health insurance are doing so illegally. If the justices rule that the payments are not allowed, the entire health-care law could be in jeopardy. | At issue in the case — the most serious challenge to the law since the justices upheld it as constitutional in 2012 — is whether millions of Americans who receive tax subsidies to buy health insurance are doing so illegally. If the justices rule that the payments are not allowed, the entire health-care law could be in jeopardy. |
| The latest showdown between the Obama administration and the conservative legal strategists who have targeted the law since its passage in 2010 focuses on a once obscure phrase in the legislation: “established by the State.” | The latest showdown between the Obama administration and the conservative legal strategists who have targeted the law since its passage in 2010 focuses on a once obscure phrase in the legislation: “established by the State.” |
| The challengers say the language clearly means that the subsidies are available only for qualified individuals who purchase insurance through a marketplace — called an “exchange” — that was “established by the State.” But only about a third of the states, plus the District of Columbia, have done so. | The challengers say the language clearly means that the subsidies are available only for qualified individuals who purchase insurance through a marketplace — called an “exchange” — that was “established by the State.” But only about a third of the states, plus the District of Columbia, have done so. |
| Everywhere else, the exchanges have been set up by federal authorities, under a provision of the law that says the federal government must create such exchanges when states do not. The administration says Congress intended for purchasers in those exchanges to receive the subsidies as well. Otherwise, they contended, the law would be doomed to failure. | Everywhere else, the exchanges have been set up by federal authorities, under a provision of the law that says the federal government must create such exchanges when states do not. The administration says Congress intended for purchasers in those exchanges to receive the subsidies as well. Otherwise, they contended, the law would be doomed to failure. |
| Health-care experts have estimated that as many as 7.5 million people in 34 states could lose the subsidies if challengers prevail. | Health-care experts have estimated that as many as 7.5 million people in 34 states could lose the subsidies if challengers prevail. |
| There appeared to be no doubt that the court’s liberals would side with the administration. All four aggressively questioned Carvin, who said the issue would be settled simply by reading the words: “established by the state.” | There appeared to be no doubt that the court’s liberals would side with the administration. All four aggressively questioned Carvin, who said the issue would be settled simply by reading the words: “established by the state.” |
| Justice Elena Kagan said Carvin could not ignore that the law sets up a process for federal authorities to step in and establish exchanges if the states opted not to. Without the subsidies, she said, that would be setting up exchanges in which “there will be no customers and there will be no products.” | Justice Elena Kagan said Carvin could not ignore that the law sets up a process for federal authorities to step in and establish exchanges if the states opted not to. Without the subsidies, she said, that would be setting up exchanges in which “there will be no customers and there will be no products.” |
| During the time allotted to Solicitor General Donald B. Verrilli Jr., representing the government, the tough questions came from conservative Justices Antonin Scalia and Samuel A. Alito Jr. | During the time allotted to Solicitor General Donald B. Verrilli Jr., representing the government, the tough questions came from conservative Justices Antonin Scalia and Samuel A. Alito Jr. |
| When Verrilli said Carvin’s version “cannot be the statute Congress intended,” Scalia replied, “The question is whether it’s the statute Congress wrote.” He said it was not up to the court to “twist the words as necessary” to make them fit the government’s view. | |
| As is customary, Justice Clarence Thomas asked no questions. | As is customary, Justice Clarence Thomas asked no questions. |
| White House spokesman Josh Earnest said Wednesday afternoon that White House counsel Neil Eggleston briefed President Obama about the court arguments on Obamacare. The “administration is quite pleased with the performance of the solicitor general,” Earnest said. | |
| “There is no contingency plan that could be implemented to prevent the catastrophic damage that would be done” if the justices ruled against the law, Earnest said. “We would see millions of people lose their health insurance, prices would likely go through the roof, and there’s likely not a whole lot the government could do about it,” he said. | |
| The Supreme Court in 2012 upheld the constitutionality of the ACA by a 5-to-4 vote. Roberts sided with the court’s four liberal justices to save the law. The current challenge focuses on how the law should be interpreted. | The Supreme Court in 2012 upheld the constitutionality of the ACA by a 5-to-4 vote. Roberts sided with the court’s four liberal justices to save the law. The current challenge focuses on how the law should be interpreted. |
| While supporters of the health-care act have described the lawsuit challenging the subsidies as frivolous, the courts that have looked at the question find the questions raised more difficult. | While supporters of the health-care act have described the lawsuit challenging the subsidies as frivolous, the courts that have looked at the question find the questions raised more difficult. |
| A panel of the U.S. Court of Appeals for the D.C. Circuit ruled 2 to 1 for the challengers, but the full D.C. Circuit put that ruling aside to let all the court’s judges weigh in. | A panel of the U.S. Court of Appeals for the D.C. Circuit ruled 2 to 1 for the challengers, but the full D.C. Circuit put that ruling aside to let all the court’s judges weigh in. |
| Before that could happen, though, the Supreme Court accepted King v. Burwell, a similar case from Virginia. It was a unanimous decision by a panel of the U.S. Court of Appeals for the 4th Circuit that sided with the Obama administration. | Before that could happen, though, the Supreme Court accepted King v. Burwell, a similar case from Virginia. It was a unanimous decision by a panel of the U.S. Court of Appeals for the 4th Circuit that sided with the Obama administration. |
| Among the six appeals court judges who considered the arguments in the two cases, two said it was clear the subsidies should not be allowed and two said it was clear the law intended for everyone to receive them. The other two formed the controlling opinion from the 4th Circuit, which said it was a close call. | Among the six appeals court judges who considered the arguments in the two cases, two said it was clear the subsidies should not be allowed and two said it was clear the law intended for everyone to receive them. The other two formed the controlling opinion from the 4th Circuit, which said it was a close call. |
| “Simply put, the statute is ambiguous and subject to at least two different interpretations,” wrote U.S. Circuit Judge Roger L. Gregory . | “Simply put, the statute is ambiguous and subject to at least two different interpretations,” wrote U.S. Circuit Judge Roger L. Gregory . |
| But in such cases, Gregory wrote, courts should defer to the agency, and he said the Internal Revenue Service permissibly “crafted a rule ensuring the credits’ broad availability and furthering the goals of the law.” | But in such cases, Gregory wrote, courts should defer to the agency, and he said the Internal Revenue Service permissibly “crafted a rule ensuring the credits’ broad availability and furthering the goals of the law.” |
| Carvin, representing individuals in Virginia who say that without the availability of the subsidies they would be exempt from buying health insurance they do not want, said the law is not ambiguous. | Carvin, representing individuals in Virginia who say that without the availability of the subsidies they would be exempt from buying health insurance they do not want, said the law is not ambiguous. |
| The government’s claim that an exchange established by the state is the same as one established by the federal government is simply trying to turn one thing into something completely different, he said. | The government’s claim that an exchange established by the state is the same as one established by the federal government is simply trying to turn one thing into something completely different, he said. |
| “It would certainly be convenient, for an agency seeking to rewrite a statute, if an English phrase can become a term of art on the government’s mere say-so,” Carvin wrote in his brief. “It cannot.” | “It would certainly be convenient, for an agency seeking to rewrite a statute, if an English phrase can become a term of art on the government’s mere say-so,” Carvin wrote in his brief. “It cannot.” |
| But Verrilli said the challengers were ignoring the intent of a nearly 1,000-page law because of a four-word phrase. | But Verrilli said the challengers were ignoring the intent of a nearly 1,000-page law because of a four-word phrase. |
| “Determining the meaning of a statute duly enacted by Congress, particularly a statute as consequential as this one, by focusing on isolated phrases divorced from textual crossreferences, definitions, and context — and with no regard for the statute’s structure and design — does not respect the rule of law,” he wrote. | “Determining the meaning of a statute duly enacted by Congress, particularly a statute as consequential as this one, by focusing on isolated phrases divorced from textual crossreferences, definitions, and context — and with no regard for the statute’s structure and design — does not respect the rule of law,” he wrote. |
| Challengers of the subsidies have said the text should be clear enough. But if an intent is needed, they say withholding the tax credits was a way to coerce states into creating the exchanges. | Challengers of the subsidies have said the text should be clear enough. But if an intent is needed, they say withholding the tax credits was a way to coerce states into creating the exchanges. |
| But Verrilli said such an incentive would have been made more clearly if that were Congress’s goal. And the administration received a boost from 22 states — some that established exchanges, others that relied on federal authorities to do so — saying that they did not understand that there was only one way for their citizens to receive the subsidies. | But Verrilli said such an incentive would have been made more clearly if that were Congress’s goal. And the administration received a boost from 22 states — some that established exchanges, others that relied on federal authorities to do so — saying that they did not understand that there was only one way for their citizens to receive the subsidies. |
| “While the extensive records of that deliberative process show that the states relied on many factors and came to diverse conclusions when selecting an exchange model, conspicuously absent is evidence that states contemplated the dramatic consequence of depriving their residents of tax credits or destroying their own insurance markets,” said the brief filed by Virginia and others. | “While the extensive records of that deliberative process show that the states relied on many factors and came to diverse conclusions when selecting an exchange model, conspicuously absent is evidence that states contemplated the dramatic consequence of depriving their residents of tax credits or destroying their own insurance markets,” said the brief filed by Virginia and others. |