Supreme Court Upholds Obamacare Subsidies, 6-3, Protecting Benefits For 1.3 Million Floridians
FlaglerLive | June 25, 2015
Some 1.3 million Floridians and 5 million more across the country will not lose their health insurance subsidies as the U.S. Supreme Court this morning ruled decisively, by a 6-3 vote, that the subsidies are legal and must remain in place, even in states that have not established their own health insurance exchanges.
The decision, written by Chief Justice John Roberts–who provided the crucial vote in a 5-4 decision upholding the fundamentals of the Affordable Care Act in 2012–was joined this time by another conservative, Anthony Kennedy, and provided the Obama administration a big win on a politically fraught issue.
“This was a good day for America,” Obama said in a 10-minute speech at the White House just before noon. “Let’s get back to work.”
The decision hinged on the interpretation of just four words in the Affordable Care Act that the Virginia plaintiffs said preempted the federal government from offering tax subsidies to recipients of insurance under Obamacare unless those recipients live in states that have their own health exchanges. Most states, including Florida, refused to set up those exchanges, but consumers were free to access the federal health exchange marketplace instead.
In Florida, upwards of 1.3 million residents receive subsidies under Obamacare, as do 6,000 residents in Flagler County.
“This was a long shot I thought from the very beginning,” Jeffrey Toobin, the legal analyst, said on CNN in the wake of the ruling. “This is an interpretation of the law, of these four words, that not a single member of Congress said they thought was the correct interpretation.”
“In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase,” Roberts’s opinion reads.
Justices Kennedy, Ruth Baber Ginsburg, Stephen Breyer, Sonya Sotomayor and Helena Kagan joined Roberts’s majority opinion. Justices Scalia, Thomas and Alito dissented. Scalia read the dissent from the bench.
“The combination of these three reforms—insurance market regulations, a coverage mandate, and tax credits—reduced the uninsured rate in Massachusetts to 2.6 percent, by far the lowest in the Nation,” Roberts wrote ion his introductory arguments, tracing the history of the Affordable Care Act to its progenitor in Massachusetts, during the governorship of Mitt Romney. “The Affordable Care Act adopts a version of the three key reforms that made the Massachusetts system successful.” The words, seemingly just a history lesson, are significant and surprising as a strong endorsement of the law by Roberts.
Roberts then tackled the plaintiffs’ argument. “If the statutory language is plain, we must enforce it according to its terms,” he wrote. But oftentimes the ‘meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.’,” he wrote, citing a 2000 case.
After analyzing the wording of the law, Roberts wrote: “The upshot of all this is that the phrase ‘an Exchange established by the State under [42 U. S. C. §18031]’ is properly viewed as ambiguous. The phrase may be limited in its reach to State Exchanges. But it is also possible that the phrase refers to all Exchanges—both State and Federal—at least for purposes of the tax credits. If a State chooses not to follow the directive in Section 18031 that it establish an Exchange, the Act tells the Secretary to establish ‘such Exchange.’ §18041. And by using the words ‘such Exchange,’ the Act indicates that State and Federal Exchanges should be the same. But State and Federal Exchanges would differ in a fundamental way if tax credits were available only on State Exchanges—one type of Exchange would help make insurance more affordable by providing billions of dollars to the States’ citizens; the other type of Exchange would not.”
The chief justice concedes that the “Affordable Care Act contains more than a few examples of inartful drafting,” and that Congress wrote key parts of the law in secret, passing it through the “reconciliation” process–a legislative maneuver that skirts certain obstacles in the Senate. “As a result, the Act does not reflect the type of care and deliberation that one might expect of such significant legislation,” the opinion reads. “An Exchange established by the State” is one of those ambiguous phrases, he writes. Which turns the meaning of the phrase back to the law’s larger context.
Roberts finds the plaintiffs’ argument that Congress meant the phrase to be taken literally “implausible.”
“Those credits,” Roberts concludes, referring to the subsidies, “are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”
He was not done, reserving the opinion’s strongest words to a form of concluding commandment in the final three paragraphs of the ruling: “A fair reading of legislation demands a fair understanding of the legislative plan,” Roberts wrote. “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.”
Scalia’s dissent focuses on the decision’s reasoning while leaving silent the politically-motivated decisions of states not to establish the exchanges (most states that did not do so, Florida included, did so because of political opposition to Obamacare): “Worst of all for the repute of today’s decision, the Court’s reasoning is largely self-defeating. The Court predicts that making tax credits unavailable in States that do not set up their own Exchanges would cause disastrous economic consequences there. If that is so, however, wouldn’t one expect States to react by setting up their own Exchanges? And wouldn’t that outcome satisfy two of the Act’s goals rather than just one: enabling the Act’s reforms to work and promoting state involvement in the Act’s implementation? The Court protests that the very existence of a federal fallback shows that Congress expected that some States might fail to set up their own Exchanges. […] So it does. It does not show, however, that Congress expected the number of recalcitrant States to be particularly large. The more accurate the Court’s dire economic predictions, the smaller that number is likely to be. That reality destroys the Court’s pretense that applying the law as written would imperil “the viability of the entire Affordable Care Act.”