King ruling dims ACA foes' legal hopes

The U.S. Supreme Court's 6-3 decision upholding premium subsidies for Americans in all states puts to rest months of fretting over the immediate future of the Affordable Care Act. While it doesn't necessarily drive a stake through the heart of all anti-Obamacare litigation, legal experts agreed it does send a discouraging message to the law's legal foes.

Last week's decision in King v. Burwell should be a “big hint” to ACA challengers that the Supreme Court is not going to tolerate attempts to use the courts to change the law, said Elizabeth Wydra, chief counsel for the liberal Constitutional Accountability Center. The strength of the majority opinion should be a signal to ACA opponents that they need to work through the political process, she said.

Even some opponents of the law expressed pessimism about rolling it back through the courts.

“We're kind of on the downward spiral,” said Hans von Spakovsky, a senior legal fellow at the conservative Heritage Foundation. Any big changes in the law, likely will have to wait until voters elect a Republican president, he added.

Still, the King ruling isn't the end of the line for Obamacare foes seeking to hobble the ACA through the courts.

The high court majority, led by Chief Justice John Roberts, held that the law read in its entirety was clear in allowing Americans in all states to receive the subsidies. The majority rejected the plaintiffs' narrow focus on a section of the law stating that subsidies are available only to those who enroll through “an exchange established by the state.”

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Roberts wrote in the opinion. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”

The justices declined to find the law's wording ambiguous as grounds for upholding the subsidies under the court's Chevron doctrine of deferring to administrative discretion when a statute is unclear. Such reasoning would have left the matter of subsidies open to re-interpretation by future presidential administrations.

If the court had ruled against the Obama administration, an estimated 6.4 million Americans in at least 34 states would have lost their subsidies, making coverage unaffordable for many of them and throwing the entire individual insurance market into turmoil.

A dissenting opinion written by Justice Antonin Scalia and joined by Justices Samuel Alito and Clarence Thomas criticized the majority for performing “somersaults of statutory interpretation.” Scalia wrote that the phrase “established by the state” is clear and should disallow subsidies through the federal exchange.

“Words no longer have meaning if an exchange that is not established by a state is 'established by the state,' ” he wrote.

Following the ruling, President Barack Obama said that the Affordable Care Act is “here to stay.” Obama said healthcare is a right of all Americans, drawing parallels between the ACA, Social Security and Medicare. “We chose to write a new chapter,” he said. “If we get sick, we'll be able to still look after our families ... This was a good day for America. Let's get back to work.”

But Wisconsin Gov. Scott Walker, a leading Republican presidential hopeful, said the ruling means congressional Republicans must “redouble their efforts to repeal and replace” the law.

In contrast, Michigan's Republican governor, Rick Snyder, said he appreciates that the court resolved the “deep uncertainty” of the issue in his state, which uses the federal exchange.

Still, there are other pending court challenges to the healthcare reform law.

A federal district judge in Washington is considering a lawsuit filed by House Republicans arguing that the Obama administration is spending $175 billion that Congress never appropriated for the ACA's cost-sharing provisions. Those provisions offer lower-income exchange plan members reduced deductibles, copays and coinsurance.

The Obama administration says the House Republicans lack legal standing to bring the suit because they were not injured by the administration's actions. Legal experts say it could be difficult for House members to achieve standing because of Supreme Court precedent against bringing political disputes to court. But if the plaintiffs can get past the standing issue, their substantive arguments stand a chance of success, experts say.

During a hearing on the standing issue last month, Judge Rosemary Collyer, a George W. Bush nominee, appeared highly skeptical of the administration's arguments against granting the plaintiffs standing, and she asked both sides for additional documentation.

Nicholas Bagley, an assistant professor of law at the University of Michigan, called the House lawsuit the “biggest wildcard” when it comes to the ACA's future in the courts. “The elimination of the cost-sharing subsidies would be a substantial blow,” he said. “But most legal observers, including me, think the House doesn't have standing to challenge the administration's decision.”

Other legal observers say two other cases pose a potentially serious threat to the ACA. The plaintiffs in those cases say the ACA is unconstitutional because it is a revenue-raising law that should have originated in the House rather than the Senate. Democrats say the bill did originate in the House as a different measure. Appellate panels have dismissed those cases. The plaintiffs have asked the full appeals courts to rehear them.

Some diehard Obamacare foes predict legal challenges will continue. “I don't think plans of challenging various aspects of Obamacare end with this (King) decision,” said Josh Blackman, an assistant professor at South Texas College of Law who filed an amicus brief in the case on behalf of the Cato Institute supporting the King plaintiffs. He said the law will face new scrutiny after the next president takes office and other provisions of the law, such as the “Cadillac plan” tax—a 40% tax on high-cost employer health plans—go into effect.

But Ankur Goel, a partner with McDermott Will & Emery who co-authored an amicus brief in support of the administration in the King case, said it will be more difficult for Obamacare foes to win their cases in the wake of the King ruling. “I'm not quite ready to say this is the last,” he said. “But I do think the longer the Affordable Care Act is in place and operating, and the more entrenched it becomes, that affects how successful court challenges (will be).”