King v. Burwell; Can’t Quite Let It Go!

February 20, 2015

The Supreme Court will hear from counsel for the parties in King v. Burwell on March 4, a week from Wednesday. I have some thoughts. I want to start by sharing the issue, as the Court formulated it:

Whether the Internal Revenue Service may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through exchanges established by the federal government under Section 1321 of the Patient Protection and Affordable Care Act.

Note what issues are not before the Court:  Obamacare is bad; Obamacare costs me money; But freedom; etc. If process matters, the narrow question before the Court involves the right of the IRS, as the agency charged with administering the subsidies, to interpret the statute as it has.

Timothy Egan wrote The Plot to Kill Health Care for the New York Times today. In his piece Mr. Egan shared a colorful quote from Michael S. Greve, a law professor and the former chair of the Competitive Enterprise Institute. Professor Greve said:

This bastard has to be killed as a matter of political hygiene. I don’t care how this is done, whether it’s dismembered, whether we drive a stake through its heart, whether we tar and feather it and drive it out of town, whether we strangle it.

Professor Greeve has a way with words, for sure, but he’s sharing a sentiment that Republicans hold widely. The law must die, and King v. Burwell is the best hope, for right now. (If anyone thinks a victory for the government will end attempts to destroy the Affordable Care Act, there’s a deed to a bridge on my desk. Call me; we’ll talk!)

So let’s pick this thing apart, just a bit. First, the notion of deferring to administrative agency interpretations has been a core principle of jurisprudence for a very long time. To learn more about the issue read Judicial Deference to Administrative Interpretations of Law. The author? Associate Justice Antonin Scalia, writing for the June 1989 edition of the Duke Law Journal. (Just before the opinions issued in the first Obamacare case, Justice Scalia published a book in which he noted that some inconsistencies can be explained because “wisdom has come late.” Expect that Justice Scalia has gotten wise, yet again, late in the process!)

Second, figuring out a justifiable rationale for the suit presents real challenges. But for what may be a drafting error, the plaintiffs have offered no basis for treating insureds who qualify for subsidies differently because of the state in which they reside.

States contribute no money to the exchanges, so they are not harmed. Individuals in federal exchange and state exchange states, similarly situated, receive the same subsidy; thus, no individual is harmed by virtue of the Internal Revenue Service interpretation. Finally, while federal exchange state citizens not getting subsidies saves money, individuals have no standing to raise federal government spending issues in federal court.

So, we’re left with a group of people—four, three of whom are almost certainly not affected by the subsidies at all—who don’t like the Affordable Care Act. Add to the mix some smart attorneys, being paid by Koch Nation, who want to tank an entire system. And against them? The federal government.

But wait, there’s more. (Feels like an infomercial, right?) Stephanie Mencimer wrote America’s largest Health Care Company Tells Supreme Court That Anti-Obamacare Argument Is “Absurd” for Mother Jones on February 9. The article refers to Hospital Corporation of America (HCA). HCA does not have a liberal agenda. Its founder was Thomas Frist Sr., whose son Bill was a Republican Senator from Tennessee and the Senate Majority Leader. (Governor Rick Scott (Rep.-Fla.) was its CEO when it committed fraudulent acts that resulted in a later payment of about $2 billion to the government.)

Given the connections, you might expect HCA to oppose the Affordable Care Act. Not so fast! Here are the first two sentences in the introduction to HCA’s amicus brief in King v. Burwell:

The availability of subsidized coverage in states with federally-facilitated Exchanges is a critical component of the ACA’s statutory structure. Without these subsidies, important provisions of the statute would make little sense, and Congress’s basic objectives would be thwarted.

I’ve been practicing law for 12,179 days. I’ve been watching the Supreme Court for a longer time. I would not expect to agree with HCA on anything. That all said, in all of those days I have never seen anything sillier than what has been offered by the plaintiffs in this case. Alas, the times are more than silly than I can recall, ever ever. Time will tell, and we’ll wait and see.

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