King v. Burwell Tests the U.S. Supreme Court’s Reputation

If the Supreme Court sides with the plaintiffs in King v. Burwell, and holds that federal tax credits are unavailable for millions of people who purchase their insurance on federal health exchanges, many will suffer needlessly and insurance markets may well be destroyed in 36 states. In addition to the health insurance implications, this case has high stakes for the legal world as well. As some of our leading Supreme Court commentators have said, the case threatens the integrity and prestige of the Supreme Court itself.

Linda Greenhouse, who covered the Court for many years for the New York Times and now is one of its opinion writers, wrote an essay, “The Supreme Court at Stake.” Her point was that the legal issues in King so strongly favored the government that the justices could rule for the plaintiffs only by suspending their long-held views on how to read federal statutes and, if they were to take that step, they would have much to explain, not just to the parties and to the country, but to “history.” Jeffrey Toobin, author of several best-selling books on the Court, and CNN’s Supreme Court reporter, has said that the main claim in this “mean-spirited” case “borders on the frivolous,” even though the stakes are “life and death.”

What is driving these commentators to take such unusually strong positions? The answer lies in the clear text of the Affordable Care Act. The law anticipates that states would create health insurance exchanges implementing the now iconic three-legged stool. Under the law, 1) insurance companies are required to cover people with pre-existing medical conditions; 2) most people have to purchase health insurance or pay a penalty; and 3) folks who can’t easily afford the premiums will receive federal tax credits to defray the cost.

The law also says quite clearly that, if the states don’t establish that kind of exchange, the federal government must create “such” an exchange. The rest of the law as well as its legislative history and context demonstrate beyond any doubt that these federal exchanges would operate the same way as the ones created and run by the states, including offering federal tax credits.

The plaintiffs have taken one section of the law completely out of context and argued that federal subsidies are unavailable on federal exchanges. Were this any other law other than the controversial Affordable Care Act, this claim would have been soundly rejected by the lower courts. But, as we know from other litigation, ACA cases are different and several lower court judges accepted the plaintiffs’ arguments though all were judges appointed by Republican presidents.

Greenhouse and Toobin, and many others are correct that this case represents political maneuverings masquerading as legal arguments. Hopefully, the Supreme Court will see it the same way and rule for the government. If it fails to do so, not only with the health care of millions of people be at stake but also the Court’s reputation as a court of law not a political veto council.

Eric J. Segall, Kathy and Lawrence Ashe Professor of Law, teaches federal courts and constitutional law I and II. He is the author of Supreme Myths: Why the Supreme Court is not a Court and its Justices are not Judges. His articles on constitutional law have appeared in, among others, the Stanford Law Review, the UCLA Law Review, the George Washington Law Review, the Washington University Law Review, the University of Pennsylvania Journal of Constitutional Law, the Northwestern University Law Review Colloquy, and Constitutional Commentary.

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