Divining The King V. Burwell Effect
A little-watched case with a chance to sink Obamacare has turned into the must-watch hearing of this Supreme Court session.
King v. Burwell has gone from fringe long-shot to arguably the most high-profile case of the Supreme Court's term, with all the trappings -- line sitters, protest signs and even the same combatants from 2012's ACA challenge.
But the implications remain just as large as they initially appeared years ago -- when one lawyer warned that the case was "for all the marbles."
If anything, the reality looms even larger now that the exchanges are live, given that subsidies used by as many as 10 million Americans are expected to be directly affected if the court rules for the plaintiffs, and the entire ACA's future could be in doubt too.
The plaintiffs have argued that the letter of the law is clear: Only the 13 states that established their own insurance exchange can offer subsidies, and that the Internal Revenue Service has illegally interpreted the ACA to allow the subsidies in the 37 states with a federally facilitated exchange.
However, the plaintiffs' argument has essentially taken two somewhat competing forms:
That the framers of the ACA deliberately intended this measure in order to induce states to establish their own insurance exchanges; and
That if the language is indeed an error, as some defenders of the law have argued, Congress should move to correct it -- rather than allow IRS to interpret it.
One reason to make two arguments is to appeal to as many justices as possible, Jonathan Adler, a Case Western Reserve University law professor and one of the architects of the challenge, said on a Slate podcast last week.
"To have their strongest day, the challengers in King would need to persuade the court that the law clearly and unambiguously limits subsidies only to certain states," Sam Baker wrote at National Journal.
Beyond the argument that IRS has the authority to interpret the law, the White House may invoke the Pennhurst doctrine, which could be especially palatable to the court's conservative justices. The doctrine focuses on ensuring that the federal government doesn't violate state rights.
"This could be an attractive expansion of the Pennhurst principle for the more conservative justices, which is one of the reasons why I think it is potentially a powerful argument for the government," Samuel Bagenstos, a professor of administrative law at the University of Michigan, told Vox's Adrianna McIntyre.
Nearly every state potentially affected by a ruling in King has failed to move forward with a clear contingency plan, such as proactively establishing its own exchange.
The economic implications could be substantial. While many have focused on what happens to consumers in states with federally facilitated exchanges -- with premiums on the federal insurance exchange increasing by as much as 774% -- there's a trickle-down effect on the healthcare industry, too. The average mid-size hospital in a state with a federally facilitated exchange could see a loss of nearly $2 million in revenue.
The plaintiffs, meanwhile, have begun to make a new economic argument of their own: That if a victory in King leads to the collapse of the ACA, the entire nation will benefit.
"If the King plaintiffs prevail before the Supreme Court, it will mean more jobs, more hours and higher incomes for millions of Americans -- particularly part-time and minimum-wage workers," Michael Cannon, another architect of the King challenge, wrote in USA Today.
Of course, there will be a temptation to overweight the oral arguments on Wednesday -- there always is.
"Really hoping we learned from the last (Supreme Court) argument on the ACA," tweeted Charles Ornstein, a ProPublica reporter and president emeritus of the Association of Health Care Journalists. "Let's keep tea leaf reading to minimum."
Dan Diamond is an executive editor with the Advisory Board in Washington. A version of this article originally appeared on the California HealthLine website.
