Five surprises from the Supreme Court’s ‘Obamacare’ decision

The Supreme Court’s ruling in King v. Burwell is a major victory for President Barack Obama and other supporters of the Affordable Care Act (ACA). The decision means that more than 6.4 million people who were using tax credits to purchase health insurance may continue to receive them. Without this assistance, millions would have lost coverage, and premiums for everyone else in the federal exchange would have skyrocketed.

The outcome is not entirely surprising, since it is consistent with what the writers of the ACA intended (according to this article and this amicus brief filed by health policy scholars). Even so, there are at five surprising aspects of this case that we will be talking about for a long time.

First, it is surprising that so many states rejected the opportunity to establish a health insurance exchange. The conventional wisdom when the law was enacted in March 2010 was that the promise of federal money and the threat of a federal takeover were enough to convince virtually every state to retain control. The 2010 elections dramatically altered the composition of state governments and empowered tea party voices advocating for complete opposition. The traditionally powerful interest groups in most states strongly supported an exchange, including insurers, hospitals, providers and consumer advocates. Even so, opposition was strong enough that 34 states ultimately defaulted to the federal exchange.

This was a major blow for the Obama administration, especially as it struggled to launch the website, HealthCare.gov, through which people in those states would purchase coverage. But this setback was only temporary. The website got better, and enrollment targets were reached. In fact, many states that chose to establish an exchange have struggled with complicated technology and financing challenges. Many leaders now wonder why they worked so hard to establish an exchange and whether it made sense for each state to reinvent the wheel. A ruling against the government in King v. Burwell would have forced those 34 states to figure out a way to establish an exchange at the precise moment that some of the other 16 are trying to find a way to scale back.

The second major surprise is that the Supreme Court even took the case. The idea that there was a drafting error or a problem with the wording of the statute did not emerge until well after most of the 16 states already decided to establish an exchange. The plaintiff’s version of history did not seem consistent with how the states made their decisions. This was all the more surprising given that the lower courts were still considering Halbig v. Burwell, another lawsuit over the legality of the subsidies in states using the federal exchange. 

Third, that the court took the case means there were at least four justices willing to rule against the government, since that is the minimum number needed to vote to hear a case. It is therefore surprising that the final vote was 6-3, with Chief Justice John Roberts and Justice Anthony Kennedy voting in the majority. Does this suggest that someone had a change of heart since agreeing to hear the case?

The fourth surprise is how the decision was reached. The likely path to victory for the government seemed to be a ruling consistent with the lower courts following the so-called Chevron rule (named after a decision in 1984): If a statute is deemed ambiguous and if the executive branch’s interpretation is considered reasonable, then the courts are supposed to defer to the administration.

Instead, Roberts wrote for the majority in King v. Burwell that Chevron “is not the appropriate framework” and that “it is instead the court’s task to determine the correct reading” of the parts of the law in question. He went on to explain that “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 the way that is consistent with the former and avoids the latter.” This is more than a trivial bit of legalese. The implication is that there is very little, short of congressional repeal, any of the Republicans aspiring to be president can do to remove the subsidies after taking office.

Finally, Justice Antonin Scalia’s dissent is surprisingly aggressive, even for him. He sarcastically writes — with a clear tone of bitterness — that the court has rewritten the law enough that it should now be known as “SCOTUScare,” (after the acronym for the Supreme Court of the United States). He refers to part of Roberts’ opinion as “pure applesauce.” Elsewhere he calls part of the majority opinion “absurd” and “interpretive jiggery-pokery.” By the time he wrote this dissent he likely knew he was also on the losing side of Friday's Obergefell v. Hodges decision recognizing same-sex marriage rights. Beyond humorously introducing new words to the health reform lexicon, Scalia’s writings might suggest discontent with the direction of the Court and his place on it. 

Regardless of how we got to this point and the surprises along the way, this is a landmark moment for health reform. It has been only a little more than five years since the ACA was signed into law, yet it has already survived a presidential election, more than 50 congressional repeal votes and now two Supreme Court challenges. Repealing the law appears less and less realistic as time goes on. The longer people receive coverage and benefit from greater access to health care, the more difficult it will be to take away their insurance. Hopefully, there are not many more surprises around the corner, and we can focus on making the law work better.