People For the American Way Foundation

Ominous Sign from the Roberts Court on ACA Subsidies

The Supreme Court announced today that it will consider the appeal of a case that was designed by activists to take a wrecking ball to the Affordable Care Act. Since only one circuit has made a final ruling on the issue (a unanimous decision rejecting the ACA opponents' legally weak, transparently political argument), there is no split among circuit courts requiring resolution. In addition, the issue has yet to be decided by three additional circuits that have similar cases pending. So today's action begs the question: Why does the Roberts Court want to hear this case, and why now?

PFAW Foundation's Supreme Court 2014-2015 Term Preview discussed the possibility that the Court would address this issue. As we wrote then:

Opponents of the Affordable Care Act strategically launched lawsuits in four different circuits challenging federal subsidies for millions of Americans buying health insurance on federally-run exchanges. The circuits were apparently selected to maximize the possibility of a circuit split, which in turn would maximize the likelihood of getting the case heard by the Roberts Court, which (they hope) would deliver a crippling blow to Obamacare. Decisions have been reached in two of the circuits, although one has since been vacated.

Section 1311 of the ACA says states should set up insurance exchanges, while Section 1321 of the Act says the federal government can set one up if a state doesn't. Subsidies are available for less well-off people getting health insurance through an exchange, based on the amount the person pays for the insurance s/he is enrolled in through an exchange "established by the state under

1311" of the ACA. The law's opponents hope to have the Supreme Court rule that Congress intended for subsidies to be unavailable to Americans purchasing insurance through the federally-established exchanges that the law calls for in cases where the state does not step in. In other words, the argument is that Congress intended to undercut the financial viability of the law and thwart its central purpose.

A unanimous panel of the Fourth Circuit rejected this wild claim in King v. Burwell. However, two far right judges on the D.C. Circuit formed a majority in a three-judge panel ruling actually agreeing with the Obama care opponents in Halbig v. Burwell. Dissenting Judge Harry Edwards recognized the lawsuit as a "not-so-veiled attempt to gut the Patient Protection and Affordable Care Act," noting that "[i]t is inconceivable that Congress intended to give States the power to cause the ACA to crumble." The full D.C. Circuit subsequently vacated the ruling and will consider the issue en banc, and most observers expect a ruling more like the Fourth Circuit's.

But even if that happens, there are still lawsuits percolating in Indiana (Seventh Circuit) and Oklahoma (Tenth Circuit), so the hoped-for circuit split may yet occur. If it does, the Roberts Court is almost certain to consider the issue. While the case is transparently political and legally weak, that did not stop the conservative Justices when it came to the Commerce Clause challenge to the individual mandate.

The D.C. Circuit case remains pending: Oral arguments won't even be held until mid-December. The Tenth Circuit won't hear oral arguments until next year, and the Seventh Circuit case is still at the district court level. If the Court had waited for a possible circuit split to take the case, it would not have been heard until the term ending in July of 2016. But at least four Justices (the number it takes to grant a certiorari petition) are apparently unwilling to wait.

Their hunger to hear this case is ominous.