Because the Supreme Court has agreed to hear arguments in King vs. Burwell, the odds that the Court’s five conservative justices will void Affordable Care Act subsides in states that didn’t set up their own exchanges just spiked, from low to frighteningly high. As you might expect, this development has pitched the law’s supporters into a state of severe anxiety.
So in the spirit of calming everyone's nerves, I’d like to plant a flag in an unlikely, but completely plausible outcome, wherein Chief Justice John Roberts sides with the challengers, but the law survives unscathed nonetheless.
In the 2012 challenge to the health care law, the plaintiffs held both that the law’s individual mandate was an unconstitutional use of Congress’ commerce clause powers and that the law’s Medicaid expansion, as originally written, amounted to an unconstitutionally coercive use of Congress’ spending power. Because the law survived, it’s easy to forget that the Court actually agreed with both of these arguments—and still saved the law.
To avoid striking the mandate, Roberts reasonably construed it as a generalized tax incentive. You buy health insurance, or you pay a penalty (tax) for not buying health insurance—either way, you’re right with the law. Likewise, he and six other justices held that Congress could not threaten to withdraw the federal government’s existing Medicaid contributions from states that declined to adopt the law’s Medicaid expansion, effectively making the expansion optional.
The case coming before the Court next year, King v. Burwell, isn’t a constitutional case. It’s a straightforward, (and deeply ridiculous) statutory interpretation case. But Roberts could easily combine the flexibility he showed in the mandate ruling with the logic of the Medicaid ruling, and save the law one more time. In fact, in a world of pure intellectual consistency, there’s no way for Roberts to avoid this conclusion.
To oversimplify for a moment, the issue in King is whether five decontextualized words in the ACA statute—“Exchange established by the State”—mean that the IRS can’t lawfully subsidize health plans on exchanges facilitated by the federal government. If you want to know why this interpretation amounts to a baseless solicitation of right-wing judicial activism, read this or watch this.
Just because the case is ludicrous, though, doesn’t mean conservative justices won’t do the right’s bidding. Roberts, too, could agree with the challengers that the plain language of the statute unambiguously precludes the provision of subsidies to states that don’t set up their own exchanges. But that doesn’t have to be the end of the story.
Because if that’s how you read the statute, then you’re positing that Congress has used its spending and regulatory powers to compel states to set up their own exchanges. But if it’s unconstitutionally coercive for the federal government to say “take this [i.e. Medicaid expansion money], or lose all of your existing federal Medicaid funds,” it might also be unconstitutional for the federal government to say, “do this [i.e. set up an exchange] or we’ll break the insurance markets in your state.”
Obviously, the line between constitutional incentive and unconstitutional coercion is completely arbitrary, and Roberts might just shrug and say that the Medicaid expansion and the exchange subsidy scheme fall on different sides of the same line. But it’s easy to imagine at least a few Healthcare.gov states freaking out about the possibility of a bad ruling, and ramping up their own exchanges, which they weren’t inclined to establish in the first place. Which would go to show that they were coerced into doing something they otherwise wouldn’t have done.
In a similar spirit, several states, including swing states like Virginia and North Carolina, along with conservative redoubts like Arkansas and Mississippi, have argued in an Amicus brief that the challengers' reading of the statute renders the subsidy scheme unconstitutional because, per the so called Pennhurst doctrine, Congress can't use its spending power to penalize states without giving them a heads up. "Congress must give States clear notice of conditions imposed under Spending Clause statutes," the brief reads. "[T]here was no such clear notice here."
But if the Court’s reading of the subsidy scheme renders the statute unconstitutionally coercive or injurious, then, per U.S. v Booker, the Court should ask “what 'Congress would have intended' in light of the Court’s constitutional holding." And in so doing, Roberts et al would probably have to make the establishment of an exchange optional, with no penalty for using the federal fallback, just like they did when they made the Medicaid expansion optional. Along similar lines, Roberts could find for the government by invoking the principle that the Court ought to interpret the statute in a plainly constitutional way, rather than trespass into difficult constitutional questions.
The beauty of this scenario is that in addition to being a logically and intellectually consistent conclusion for Roberts to reach, it would also raise an elegant middle finger to all of the people on the right who called his integrity into question after he saved the ACA. I wouldn't bet on this outcome. But let’s hope he doesn’t read this article anyhow.
This article has been updated.