WHEN THE Supreme Court examines the Affordable Care Act again Wednesday, it will have several logical, principled paths to avoid tearing apart a law that has slowly but surely found its footing. It should take at least one of them.
The dispute before the court concerns a line of legislative text that offers federal subsidies to customers shopping for health-care insurance on a marketplace, or exchange, “established by the State.” Most states did not create their own exchanges, instead deferring to the federal government, which the law empowered to create exchanges in their stead. Without subsidies, the federal exchanges would struggle to attract enough customers to maintain viable markets. In other words, the plaintiffs insist that the architects of the law designed it in a way that begs its failure.
One road for the court would be to throw the case back to a lower court without ruling on its merits. It seems unlikely the court would agree to hear a case only to punt it away. But there are legitimate questions about whether the named plaintiffs have the proper standing to sue.
On the merits, those suing offer what they claim is one plausible rationale for the law’s potentially self-defeating language: That Congress actually meant to withhold subsidies from non-cooperative states in order to persuade them to create their own exchanges. This argument strains the imagination, since it runs counter to the law’s fundamental purpose: establishing a near-universal health-coverage program through private insurance marketplaces. There is scant evidence for this theory on the record, and the legislators who drafted the bill say it is false.
Then the question becomes: Did Congress stumble into undermining the policy, approving a bill with a highly regrettable textual error? Even if the justices accept that possibility, the government should still win. Courts generally and properly defer to executive agencies in the interpretation of ambiguous legal texts. The only way for the challengers to prevail in this case would be to show that the law’s wording is crystal clear — that the Obama administration’s interpretation is baseless. Given other provisions in the law that indicate subsidies should flow to insurance buyers regardless of what sort of exchange they use, the challengers certainly cannot make that case. The government’s interpretation must stand.
The stakes are huge. The Urban Institute recently found that a ruling hostile to the Obama administration would result in 9.3 million people losing subsidies next year. Healthy people would drop coverage. Insurers would have to hike rates by 35 percent. The number of uninsured would shoot up by 8.2 million people. Those who kept buying coverage would have to pay a lot more for skimpier benefits — if the compromised insurance markets continued functioning at all.
Fortunately, the justices need not rule based on any feared or preferred policy result. They only need to read the law reasonably.