Challengers avoid legal standing issue in King subsidies case

A new brief filed by those asking the U.S. Supreme Court to strike down the Obamacare premium subsidies focuses on what they fear are the government's strongest arguments for upholding the subsidies, experts say. But it makes no mention of new questions about whether the four individual plaintiffs have legal standing to even bring the case.

“The petitioners are trying to avoid (the standing issue) at all costs,” said Lisa McElroy, an associate professor of law at Drexel University.

At issue in King v. Burwell is whether the language of the Affordable Care Act allows federal premium tax credits only in states that established their own insurance exchanges. Experts say that if the petitioners win and subsidies are no longer available in as many as 37 states using the federal exchange, the law's insurance expansion and reforms will fall apart.

The brief filed last week argues that the ACA's term “established by the state” is not a “term of art” as the government claims, and that the Internal Revenue Service rule interpreting the law to allow premium subsidies in all states should be invalidated. “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,” the brief argues. “It cannot.”

The brief also seeks to debunk the government's argument that the word “such” proves that Congress intended the federal exchange to be considered identical to the state-run exchanges. The law says that if a state does not establish its own exchange, then HHS “shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State.”

The petitioners' brief argues that “ 'such Exchange' clarifies what HHS is establishing; it does not alter the reality that HHS, not the state, is establishing it.”

Media reports this month have raised doubts about the legal right of the plaintiffs to sue because they may not be required to buy insurance and therefore may not be harmed by the law. All four may have incomes low enough that they qualify for hardship exemptions from having to buy coverage. In addition, two reportedly are military veterans and may have health coverage through the Veterans Affairs Department. One will qualify for Medicare in June, probably before the court decides the case.

The petitioners' lack of acknowledgement of the standing issue doesn't necessarily mean they aren't worried about it, McElroy said. The Supreme Court could ask for supplemental briefings on the standing issue, or it could come up during oral arguments next month. If the justices decide that none of the plaintiffs have standing, they could dismiss the case as improvidently granted, McElroy said.

Tim Jost, a law professor at Washington and Lee University who supports the ACA, said the petitioners should have addressed the standing questions in their brief. The government previously raised the standing issue but without the benefit of the new information about the plaintiffs that has been reported. “I think very serious questions have been raised about the standing of the plaintiffs in this case and I think they have an obligation to come forward and refute those challenges,” he said.

But Andrew Kloster, a legal fellow at the conservative Heritage Foundation, said the standing issue was addressed in earlier briefs. “It's an effort to play the PR game and distract people and make it look like this is some nefarious effort rather than an honest effort to make the federal government comply with the letter of the law,” he said.

Follow Lisa Schencker on Twitter: @lschencker