In King v. Burwell, the Supreme Court will decide whether the federal government has the authority to make subsidies available to millions of Americans who buy health insurance on federal Exchanges.

Unlike the 2012 health care reform case, this is not a constitutional challenge. Rather, it presents a question of statutory interpretation: Did the federal government permissibly construe the statute to make the subsidies available to federal Exchange consumers in addition to state Exchange consumers?

The challengers point to the text of one provision of the health care reform law that, by its terms, limits the availability of the subsidies to those who buy health insurance on state Exchanges. The government counters that the Court must consider the overall context in which that language appears in order to discern Congress’s intent – and that analysis shows Congress meant to make the subsidies available nationwide.

After much anticipation, the Court heard oral argument on March 4. Of course, it’s dangerous to read too much into the remarks of the justices. Nevertheless, we pass along a few observations.

  • In the lead-up to oral argument, there was much publicity regarding potential standing concerns, i.e., whether the challengers had suffered injuries sufficient to permit them to bring suit at all.  

    At oral argument, Justice Ginsburg led with an inquiry on this threshold question. But, in the end, it appeared to be a non-issue, as the challengers represented that there was no standing concern, the federal government accepted that representation, and most justices appeared inclined to reach the merits of the case.

  • Not surprisingly, the liberal wing of the Court championed the government’s position, while Justices Alito in particular expressed support for the challengers’ position. But all eyes were on Chief Justice Roberts, who, at least coming into the oral argument, was widely viewed as the key vote in this case.

    The Chief Justice, however, was virtually silent on the merits of the case, shedding little light on where he might end up. That said, he did observe that, if the Court were to find the statute ambiguous on the point in dispute, a future Administration would be free to reverse the current statutory interpretation. While this remark may reveal nothing about his thinking, it could reflect his openness to a finding of ambiguity, given his past statements suggesting a desire to leave certain matters to the political process to resolve. Then again, it could, in the alternative, suggest his concern with a question raised by Justice Kennedy – whether it’s plausible that Congress intended to put such a consequential decision in the hands of the agency.

  • In the end, it was Justice Kennedy whose remarks drew the most attention – a familiar position for him.

    In its briefs, the federal government had asserted a federalism concern posed by the challengers’ reading of the statute. It did so to try to appeal to key justices like Justice Kennedy. Its argument went something like this: The challengers contend that Congress used the subsidies to induce states to establish state Exchanges and that, therefore, the subsidies are available only in states with state Exchanges, and not in states with federal Exchanges. But, given the Affordable Care Act’s nationwide requirement that health insurers sell and price their policies without regard to health status, the unavailability of the subsidies in states with federal Exchanges would mean the destabilization, and eventual destruction, of the individual health insurance market in those states. This is the so-called death spiral that results when sicker people increasingly opt in, and healthier people increasingly opt out, of health insurance. Congress couldn’t have intended to present states with a false choice between establishing a state Exchange and forgoing, not only the new subsidies, but also its pre-existing individual health insurance market.

    Justice Kennedy suggested that the challengers’ reading of the statute would produce a constitutional concern. States have constitutional rights under the Tenth Amendment that protect them from unconstitutional coercion by the federal government. Justice Kennedy appeared concerned that, under the challenger’s reading of the statute, states would be coerced into establishing state Exchanges, given the steep price for declining to do so.

    Where will this lead Justice Kennedy? The government hopes that, to avoid this constitutional concern, he’ll read the statute the government’s way. In contrast, the challengers hope that he’ll conclude that the challengers’ reading of the statute is the only permissible one – and that the statute is therefore unconstitutional.

Ultimately, it remains too close to close call. A ruling is expected in late June.