Supreme Court Allows Nationwide Health Care Subsidies
By ADAM LIPTAK
JUNE 25, 2015 - The New York Times
WASHINGTON — The Supreme
Court ruled on
Thursday that President
Obamafs health
care law allows the federal government to provide nationwide tax subsidies
to help poor and middle-class people buy health insurance, a sweeping
vindication that endorsed the larger purpose of Mr. Obamafs signature
legislative achievement.
The 6-to-3 ruling means that it is
all but certain that the Affordable Care Act will survive after Mr. Obama leaves
office in 2017, and has a greater chance of becoming an enduring part of
Americafs social safety net.
For the second time in three years,
the law survived an encounter with the Supreme Court. But the courtfs tone was
different this time. The first decision, in 2012, was fractured and grudging,
while Thursdayfs ruling was more assertive.
gCongress passed the Affordable
Care Act to improve health insurance markets, not to destroy them,h Chief
Justice John G. Roberts Jr. wrote for a united six-justice majority. In 2012fs
closely divided decision, Chief Justice Roberts also wrote the controlling
opinion, but that time no other justice joined it in full.
In dissent on Thursday, Justice
Antonin Scalia called the majorityfs reasoning gquite absurdh and ginterpretive
jiggery-pokery.h
He announced his dissent from the
bench, a sign of bitter disagreement. His summary was laced with notes of
incredulity and sarcasm, sometimes drawing amused murmurs in the courtroom as he
described the ginterpretive somersaultsh he said the majority had performed to
reach the decision.
gWe really should start calling
this law Scotus-care,h Justice Scalia said, to laughter from the audience.
In a hastily arranged appearance
in the Rose Garden on Thursday morning, a triumphant Mr. Obama praised the
ruling. gAfter multiple challenges to this law before the Supreme Court, the
Affordable Care Act is here to stay,h he said, adding: gWhat wefre not going to
do is unravel what has now been woven into the fabric of America.h
The ruling was a blow to
Republicans, who have been trying to gut the law since it was enacted. But House
Speaker John A. Boehner vowed that the political fight against it would
continue.
gThe problem with Obamacare is
still fundamentally the same: The law is broken,h Mr. Boehner said. gItfs
raising costs for American families, itfs raising costs for small businesses and
itfs just fundamentally broken. And wefre going to continue our efforts to do
everything we can to put the American people back in charge of their health care
and not the federal government.h
The case concerned a central part
of the Affordable Care Act that created marketplaces, known as exchanges, to
allow people who lack insurance to shop for individual health plans. Some states
set up their own exchanges, but about three dozen allowed the federal government
to step in to run them. Across the nation, about 85 percent of customers using
the exchanges qualify for subsidies to help pay for coverage, based on their
income.
The question in the case, King v.
Burwell, No. 14-114, was what to make of a phrase in the law that seems to say
the subsidies are available only to people buying insurance on gan exchange
established by the state.h
A legal victory for the
plaintiffs, lawyers for the administration said, would have affected more than
six million people and created havoc in the insurance markets and undermined the
law.
Chief Justice Roberts acknowledged
that the plaintiffs had strong arguments about the plain meaning of the
contested words. But he wrote that the words must be understood as part of a
larger statutory plan. gIn this instance,h he wrote, gthe context and structure
of the act compel us to depart from what would otherwise be the most natural
reading of the pertinent statutory phrase.h
This was challenging, he said, in
light of the lawfs gmore than a few examples of inartful drafting,h a
consequence of rushed work behind closed doors that gdoes not reflect the type
of care and deliberation that one might expect of such significant
legislation.h
But he said the lawfs interlocking
parts supported a ruling in favor of the subsidies, particularly given that a
contrary decision could have given rise to chaos in the insurance markets. A
ruling rejecting subsidies in most of the nation would have left in place other
parts of the law, including its guarantee of coverage regardless of pre-existing
conditions, its requirement that most Americans obtain insurance or pay a
penalty, and its expansion of Medicaid.
Without the subsidies, many people
would be unable to afford insurance, and healthier consumers would go without
coverage, leaving insurers with a sicker, more expensive pool of customers. That
would raise prices for everyone, leading to what supporters of the law called
death spirals.
gThe statutory scheme compels us
to reject petitionersf interpretation,h Chief Justice Roberts wrote, referring
to the challengers, gbecause it would destabilize the individual insurance
market in any state with a federal exchange, and likely create the very edeath
spiralsf that Congress designed the act to avoid.h
In dissent, Justice Scalia wrote
that the majority had stretched the statutory text too far.
gI wholeheartedly agree with the
court that sound interpretation requires paying attention to the whole law, not
homing in on isolated words or even isolated sections,h Justice Scalia wrote.
gContext always matters. Let us not forget, however, why context matters: It is
a tool for understanding the terms of the law, not an excuse for rewriting
them.h
gReading the act as a whole leaves
no doubt about the matter,h he wrote. g eExchange established by the statef
means what it looks like it means.h
Justice Scalia said the decision
had damaged the courtfs reputation for ghonest jurisprudence.h
The court, he said, had taken into
its own hands a matter involving tens of billions of dollars that should have
been left to Congress.
gThe courtfs decision reflects the
philosophy that judges should endure whatever interpretive distortions it takes
in order to correct a supposed flaw in the statutory machinery,h Justice Scalia
wrote.
gIt is up to Congress to design
its laws with care,h he added, gand it is up to the people to hold them to
account if they fail to carry out that responsibility.h
Justices Clarence Thomas and Samuel
A. Alito Jr. joined Justice Scaliafs dissenting opinion.
Chief Justice Roberts rejected the
argument that Congress had limited the availability of subsidies in order to
encourage states to create their own exchanges, a notion that had occurred
to almost no one at the time the law was enacted.
Sixteen states and the District of
Columbia have established their own exchanges. Under the law, the federal
government has stepped in to run exchanges in the rest of the states.
gThe whole point of that
provision,h Chief Justice Roberts wrote, gis to create a federal fallback in
case a state chooses not to establish its own exchange. Contrary to petitionersf
argument, Congress did not believe it was offering states a deal they would not
refuse — it expressly addressed what would happen if a state did refuse the
deal.
Justices Anthony M. Kennedy, Ruth
Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan joined the
majority opinion. In the 2012 case, Justice Kennedy was in dissent.
The case started when four plaintiffs,
all from Virginia, sued the Obama administration, saying the phrase meant that
the law forbids the federal government to provide subsidies in states that do
not have their own exchanges.
The plaintiffs challenged an Internal
Revenue Service regulation that said subsidies were allowed whether the
exchange was run by a state or by the federal government. They said the
regulation was at odds with the Affordable Care Act.
In July, the United States Court
of Appeals for the Fourth Circuit, in Richmond, Va., ruled against
the challengers.
Judge Roger L. Gregory, writing
for a three-judge panel of the court, said the contested phrase was gambiguous
and subject to multiple interpretations.h That meant, he said, that the I.R.S.
interpretation was entitled to deference.
The Supreme Courtfs ruling was
more forceful. gThis is not a case for the I.R.S.,h Chief Justice Roberts wrote.
gIt is instead our task to determine the correct reading.h
Julie Hirschfeld Davis and Michael D. Shear contributed
reporting.