Supreme Court Dispatches

High Drama for Obamacare at the High Court

Scalia and Kagan are feisty; Kennedy gives hope to people who care about affordable care.

Supporters of the Affordable Care Act gather in front of the U.S Supreme Court during a rally.

Supporters of the Affordable Care Act gather in front of the U.S Supreme Court during a rally March 4, 2015 in Washington, D.C.

Photo by Alex Wong/Getty Images

When the Supreme Court last heard oral argument on the Affordable Care Act, in NFIB v. Sebelius, arguments stretched over three long days, protesters were bused in to holler at each other, and questions about whether Congress could fix a law if it wanted to were not met by derisive laughter. But a lot has changed in a few short years, and—as oral argument begins in King v. Burwell—the sense in and around the court building is that this time, the case is both sillier and more consequential than it was last time.

The appeal is a statutory interpretation case, not a glamorous constitutional one, and the principal argument is whether four errant words in the Affordable Care Act prohibit tax subsidies in any state in which the federal government, as opposed to the state itself, runs the insurance marketplaces or “exchanges” required under the law. If the four Virginia petitioners in this case prevail with this claim, more than 8 million people (and probably many more) will likely lose access to health insurance, with life-threatening consequences for some of them. The cost of insurance would skyrocket, leading to a so-called “death spiral” which may undermine the very object of the ACA: affordable care. If the government wins, on the other hand, everything about the ACA would remain the same, and some disgruntled people (who, as it turns out, are actually quite hard to find) might have to use federal tax credits to purchase their unwanted affordable care.

The morning at the Supreme Court starts as any good morning must: Paul Ryan’s newspaper is confiscated by the marshals inside the courtroom, and he is forced to sit silently looking at the statuary like the rest of us. This is practice for silently looking at the statute, which is how we will spend the remainder of the morning.

Michael Carvin, who represents the four Virginia plaintiffs in this case, opens by explaining: “This is a straightforward case of statutory construction where the plain language of the statute dictates the result.” Justice Ruth Bader Ginsburg stops him to ask whether any of the four plaintiffs in the case actually have standing to challenge the ACA, an issue raised recently in reports from Mother Jones and the Wall Street Journal. Carvin reassures her that at least one of the plaintiffs does have standing, since he is ineligible for Veterans Administration benefits, because he only served 10 months. Then Carvin turns to his main argument: that the plain meaning of four words in Section 36(B) of the Act—“established by the states”—can more or less eat the face off the rest of the 900-plus–page law.

It’s amply clear this morning that the four liberal Justices think Carvin’s arguments are nonsensical. Justice Stephen Breyer simply reads the statute back at Carvin, patiently explaining that, “Section 1321 says, if a State does not set up that exchange, then the federal secretary shall establish and operate such exchange. … And there’s nothing else in this statute … So that’s throughout what they’re talking about. … So what’s the problem?”

Elena Kagan opens with a “simple daily life kind of” hypothetical in which, she says, “So I have three clerks, their names are Will and Elizabeth and Amanda. Okay? So my first clerk, I say, Will, I’d like you to write me a memo. And I say, Elizabeth, I want you to edit Will’s memo once he’s done. And then I say, Amanda, listen, if Will is too busy to write the memo, I want you to write such memo. Now, my question is: If Will is too busy to write the memo and Amanda has to write such memo, should Elizabeth edit the memo?”

When Carvin says “No,” Kagan retorts: “You run a different shop than I do.”

When Carvin replies that “the key point is that Congress was not agnostic as to whether states or [the Department of Health and Human Services] established the exchange,” Kagan thanks him for pointing out that his answer to her question depends on “context” and on the intent of the law as a whole.

Now Carvin is sort of famous at the court as a tough guy, who sometimes punctuates his oral arguments with a silent but somehow discernible “you dope.” Kagan, moreso Wednesday than ever, seems to be raising his unspoken “you dope” and seeing him a barely restrained “duh.” It’s pretty rare to see this level of both bombast and condescension in the high court, but this case seems to invite it.

Kagan can’t understand how the statute can work under Carvin’s reading of it: “You would be setting up an exchange with no customers and no products” if the federal exchanges could not sell insurance that is subsidized.

Justice Sonia Sotomayor brings up the so-called federalism argument that may become very important in this case. She tells Carvin, “If we read it the way you’re saying, then we’re going to read a statute as intruding on the federal-state relationship, because then the states are going to be coerced into establishing their own exchanges … Tell me how that is not coercive in an unconstitutional way?”

Justice Anthony Kennedy jumps in to add that “from the standpoint of the dynamics of federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the states are being told either create your own exchange, or we’ll send your insurance market into a death spiral.” He adds that, “It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, but there’s a serious constitutional problem if we adopt your argument.” And across the courtroom, progressives pee just a little in joy.

Carvin replies that, “The government’s never made that argument.” (It has been made in the supplemental briefs and the press.) To which Kennedy retorts, “Sometimes we think of things the government doesn’t.” And the government pees a little. Kennedy may be in play.

Sotomayor then asks: “Do you really believe that states fully understood that their citizens were not going to get subsidies if they let the federal government? What senator said that during the hearings?” Carvin replies: “The same amount of senators who said that subsidies were available on HHS exchanges. Which is none.” The degree to which one must reverse-engineer congressional history to support this narrative would violate even Captain Kirk’s directives on messing with the past. Still, Carvin’s going for it.

Chief Justice John Roberts gives Carvin an extra 10 minutes, promising, “maybe we’ll give you a little bit more of a chance to talk.” And Kagan jumps in to say, “Well, then, I’ll ask a question!”

Carvin replies, “Well, if you’re going to ruin my 10 minutes.” Which Kagan promptly does, by asking why nobody seemed to know that Carvin’s reading of the statute was even coming. “I mean, this took a year and a half for anybody to even notice this language.” Kagan and Carvin proceed to pound on one another some more.

Solicitor General Donald Verrilli then stands up to represent, well, standing. He says that at least one of the four petitioners should have standing, or else Carvin would have said otherwise. When Ginsburg asks if that means one of the four petitioners does indeed have standing, Verrilli sounds like he is saying “Look, I can’t doubt there is standing if Carvin says there is standing, but that sure shouldn’t stop you all from finding that nobody has standing …”

Verrilli turns to the text and meaning of the provision in question noting that “it precipitates the insurance market death spirals that … the statute was designed to avoid, and it revokes the promise of affordable care for millions of Americans. That cannot be the statute that Congress intended.” To which Justice Antonin Scalia promptly replies: “It may not be the statute they intended. The question is whether it’s the statute that they wrote.”

Then Justice Samuel Alito asks about the states’ rights and coercion argument, and Verrilli more or less replies, “Look, I can’t bring myself to say the statute raises constitutional federalism problems, but that sure shouldn’t stop you all from finding that petitioners lose because of constitutional federalism problems …”

Contemplating the catastrophic real-life outcomes that could happen if the petitioners lose—which nobody seems to want to talk about—Alito posits that “it’s not too late for a state to establish an exchange if we were to adopt petitioners’ interpretation of the statute.” Verrilli replies that, “In order to have an exchange approved and insurance policies on the exchange ready for the 2016 year, those approvals have to occur by May of 2015.” So, yes, it’s too late. Alito wonders if the states could be given extra time.

Scalia jumps in with a better fix: “What about Congress? You really think Congress is just going to sit there while all of these disastrous consequences ensue?”

People laugh. Even members of Congress may have laughed. Even Verrilli laughs, in his gravitas-y way: “Well, this Congress, your honor?” Verrilli tries to return to the plain text and meaning of the statute. Kennedy tries to get him back to federalism. Nothing doing. Verrilli and Scalia argue about Sen. Ben Nelson, and Verrilli comes as close as he can politely come to saying that anyone suggesting this language was a way to get Nelson’s vote is a big fibber. What he actually says is: “[What] Mr. Carvin has suggested is that this was the product of some deal to try to get votes so the act could get passed. What I would suggest to your honor is that there is objective proof that that is not true.”

Alito asks Verrilli: “If Congress did not want the phrase “established by the State” to mean what that would normally be taken to mean, why did they use that language?”

Now, this is as good a time as any to tell you that the U.S. Solicitor General has a very serious case of what I call “C-Is-for-Cookie Hand” which is a disease occurring chiefly in legal academia that involves putting the fingers of the left hand into an enormous C formation and waggling the wrist to make some sublime legal point. At this juncture I am so mesmerized by Verrilli’s C-Is-for-Cookie Hand that I do not hear his answer to this question.

Happily, Scalia puts the same question this way: “How can the federal government establish a state exchange. That is gobbledygook.”

When Alito starts to press Verrilli on what provision of the ACA holds that “only a qualified individual can enroll in a plan under an exchange?” Verrilli is close to losing his famous cool: “Well, that’s what qualified means, Justice Alito. It means that, you know, if you’re not qualified, you’re unqualified. I mean, that’s what it means!”

With only moments to spare in the arguments, Kennedy wonders aloud how much deference—what the courts call Chevron deference—the agency, in this case the IRS, should be given in interpreting its own rules: “It seems to me a drastic step for us to say that the Department of Internal Revenue and its director can make this call one way or the other when there are, what, billions of dollars of subsidies.”

Verrilli replies, “You can resolve and should resolve this statute and the statute’s meaning in our favor even without resort to Chevron deference.” Or perhaps put more plainly, “Look, I don’t think we even need to talk about Chevron deference, but that sure shouldn’t stop you all from finding that we win using Chevron deference …”

Verrilli is mighty confident of his text-and-meaning argument, that C-is-for-Cookie-Handed solicitor general.

And so we end without having talked much Wednesday about the millions of people who may suffer if petitioners win, except insofar as there is abundant confidence in some quarters that either Congress or the states would never let that happen. Even the justices who side with Carvin concede that there may be catastrophic consequences. One has to travel pretty far down the legal rabbit hole to read this statute the way petitioners do, or to find contemporaneous history to support it. But rest assured that way down in that rabbit hole—and perhaps only there—state exchanges get set up in six months, Congress gladly tweaks Obamacare, and states that all-but changed their state motto to “Hating on Obamacare since 2010” joyfully jump on the bandwagon. The ACA may still survive life in the rabbit hole, but if argument is any kind of predictor, it may be because repairing an affront to the dignity of states, not people, is always imperative.