If you are a die-hard—but clear-eyed—opponent of the Affordable Care Act, you now know that the ACA is too entrenched, among consumers and providers, either to fail on its own or be dispatched by legislative “repeal.” Accepting that their only residual hope rests with the courts, ACA opponents will boost the already considerable investment they have made in four related lawsuits that could still, as George Will gloated, “blow Obamacare to smithereens.” These challenges claim that the ACA bars “premium assistance” tax credits and subsidies to individuals purchasing health insurance on exchanges in the 36 states that have declined to set up their own and relied instead on Healthcare.gov. They argue that the plain text of one ACA provision, which references “exchanges established by the state,” excludes federally facilitated exchanges from participating in the premium assistance regime altogether. Upwards of 80 percent of health insurance buyers on exchanges utilize premium assistance. Hence, the suits, if successful, would effectively shut down federally operated exchanges, halve the total number of enrollees for all states, and wreak havoc beyond the exchanges by producing, as detailed by the health insurance industry’s trade association, “significantly unbalanced risk pools [and] dysfunctional insurance markets.”
So far, these lawsuits have gone nowhere. They have been summarily dismissed by the only two judges to rule on them, one a Clinton appointee on the District Court for the District of Columbia, and the other a Reagan appointee on the District Court in Richmond, Virginia. Both judges ruled that, when the ACA’s “statutory context is taken into account,” the opponents’ theory is “unambiguously” not a “viable” interpretation of the law’s overall text. Another provision, they held, which directs the federal Secretary of Health & Human Services to establish “such” exchanges when states fail to do so, vests HHS-run exchanges with identical functions, responsibilities, and authorities. Both judges also agreed that “there is no evidence in the legislative record that the House, the Senate, any relevant committee of either House, or any legislator ever entertained” the idea of confining premium assistance to state exchanges.
The Right’s hope is that, on appeal or in the other two cases, their litigators will draw some card-carrying movement conservative judges, inclined to look past their flimsy legal rationale and “no evidence” factual record. At this juncture, that bet seems a long shot. But it may not be entirely off base, judging from the March 25 arguments in two courts—a three-judge panel of the D.C. Circuit Court of Appeals considering the appeal from the D.C. District Court, and also the Supreme Court’s review, in a legally unrelated case, of the Obama Administration’s ACA “contraception mandate” regulation. In both cases, some (not all) conservative judges and justices showed little reticence about venting animus toward the ACA and repeating factoids and sound bites from bloggers and politicians. In these outbursts, seasoned court-watchers caught echoes of similar performances during the 2010-12 litigation over the ACA’s individual mandate, by judges and justices who ultimately voted to strike down President Barack Obama’s signature achievement.
During last week’s D.C. Circuit argument, Judge Raymond Randolph, a George H.W. Bush appointee, prodded the administration’s counsel, Assistant Attorney General Stuart Delery, at one point asking whether Delery agreed that the launch of the ACA exchanges had been an “unmitigated disaster,” and that implementation of the law has sent “costs sky-high.” Apart from its irrelevance, this gratuitous recycling of Fox News talking points seemed to betray indifference to well-publicized but inconvenient facts—ACA enrollment numbers had grown increasingly robust by the time of the argument, and health cost inflation has continuously slowed since 2008.
Judge Randolph took conspicuous pains to help Michael Carvin, the ACA opponents’ counsel, navigate the gaps in his case that had prompted the D.C. and Richmond district judges to throw it out. At the outset of the argument, Randolph’s colleague, Judge Thomas Griffith, a more moderate conservative appointed by President George W. Bush, chided that Carvin had “over-read” the principal items his brief offered as “evidence” that the ACA’s authors intended the perverse interpretation he imputed to them. He added that Carvin’s examples didn’t “persuade me.”
Randolph pushed back against Griffith, as well as the panel’s third judge, Carter appointee Harry Edwards. Randolph proclaimed, “[I]t was widely known that unless the states set up an exchange they weren’t going to get subsidies for their citizens.” To back that up, the judge cited a January 2010 letter from several Texas Democratic representatives urging Democratic leaders to adopt the House bill’s provision for a single national exchange over the Senate bill’s provision for state-run exchanges with a federal fallback option. Carvin had not mentioned this letter in his brief—for good reason: It nowhere suggests that the authors imagined that, under the Senate bill, federal exchanges lacked authority to issue premium assistance tax credits and subsidies. Randolph followed up this “example” with several others, likewise not highlighted by the opponents themselves, and for the same reason—none contains any actual evidence that legislators thought the bill meant what opponents now claim.
Judge Randolph also targeted a second linchpin of the district court decisions—their reliance on a rule that “Courts have a duty to construe statutes as a whole,” not simply particular phrases “in isolation.” To justify making an exception to this bedrock common-sense doctrine, Randolph endorsed an account of the legislative history conjured by ACA opponents—that the “established by the state” phrase on which they ground their case, itself “embodied” a deal struck while the bill was on the Senate floor, to win the vote of Nebraska Senator Ben Nelson, “on the very question at issue here … necessary to the ACA’s passage.” Because of this supposedly indispensable bargain, Carvin argues, that four-word phrase must be read in isolation, out of context, and be literally enforced by courts. But in fact, this “political compromise” narrative, which, by the end of the argument, seemed also to be gaining traction with Judge Griffith, is simply a tall tale. The pertinent language was inserted in the Senate Finance Committee. Subsequently, it was never altered on the floor as part of any “deal,” with Senator Nelson or otherwise.
However strained, such attempts to paper over the cracks in ACA opponents’ case for gutting the law could resonate with some conservative judges—and Supreme Court justices. Indeed, at the same time that Randolph was needling DOJ’s Delery, a few blocks up Capitol Hill, Justice Antonin Scalia flashed similar disdain for the ACA, and for pertinent facts, in the Supreme Court’s argument over the law’s “contraception mandate.” Scalia brushed off Solicitor General Don Verrilli’s claimed need for uniform coverage requirements, mocking that there are “a lot of exemptions” already. At one point he trivialized the women’s issues at stake, asserting, counter-factually, that the birth-control devices that the complaining corporation in the case, Hobby Lobby, refused to cover in its employee insurance policies, “is not terribly expensive stuff, is it?” Not coincidentally, two years ago, during the March 2012 oral arguments over the constitutionality of the ACA individual mandate, in similarly disparaging the law’s legislative origins, Justice Scalia twice invoked the “Cornhusker kickback,” conservatives’ short-hand for an amendment offered on the Senate floor to woo Nebraska’s Nelson. In actuality, the provision was not in the law before the Court, but Scalia assumed it was—a non-fact likely gleaned from disinformation constantly repeated on right-wing blogs. (Obamacare foes seem to share a peculiar fascination with inflating Nelson’s parental role in the ACA’s history.)
Health care reform supporters can no longer ignore the possible second crack these new legal challenges to ACA exchanges might give Justice Scalia and kindred spirits at inflicting damage far greater than remaining market or political threats. To best the Right’s predictable messaging blitz, ACA advocates must detail the vast scale of the chaos and injustice for which a court choosing to embrace opponents’ implausible claim will bear full responsibility. Most important, health care reformers need to underscore that, on the merits, the opponents’ legal theory is as absurd as their underlying fable that the ACA’s architects themselves intended the law to self-destruct.
Simon Lazarus is Senior Counsel to the Constitutional Accountability Center, a public interest law firm, think tank, and action center.