John Roberts Saves Obamacare, Again

The Court upheld the health care law’s insurance subsidies in every state.

A guard stands on the steps of the Supreme Court Building, August 20, 2014 in Washington, DC. (Photo by Mark Wilson/Getty Images)
National Journal
Sam Baker
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Sam Baker
June 25, 2015, 6:11 a.m.

Obama­care dodged yet an­oth­er ex­ist­en­tial threat Thursday at the Su­preme Court, mak­ing the law’s sur­viv­al more as­sured than ever be­fore.

In a 6-3 rul­ing writ­ten by Chief Justice John Roberts, the Court up­held Obama­care’s in­sur­ance sub­sidies na­tion­wide, re­ject­ing a po­ten­tially dev­ast­at­ing law­suit that had aimed to ax those pay­ments to people in 34 states.

The rul­ing is a huge re­lief for Pres­id­ent Obama, whose sig­na­ture do­mest­ic achieve­ment was on the line; and for Re­pub­lic­ans, who were deeply di­vided over pos­sible “fixes” if the Court had ruled the oth­er way.

(RE­LATED:  Scalia on Obama­care: ‘We Should Start Call­ing This Law SCOTUS­care’)

It’s also the second time in three years Roberts has helped pull Obama­care back from the brink of dis­aster; Thursday’s rul­ing came al­most ex­actly three years after Roberts cast the de­cid­ing vote to up­hold the health care law’s in­di­vidu­al man­date.

And this time, it seemed to come a lot easi­er.

Roberts’s de­cision, joined by Justice An­thony Kennedy as well as the Court’s four tra­di­tion­al lib­er­als, is a par­tic­u­larly strong, square win for the ad­min­is­tra­tion. Un­like its rul­ing on the in­di­vidu­al man­date, this time the Court didn’t reach for a middle ground. There are no signs of a last-minute change of mind. The Court ac­cep­ted pretty much all of the Obama ad­min­is­tra­tion’s front-line ar­gu­ments in de­fense of Obama­care’s sub­sidies.

“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 a way that is con­sist­ent with the former, and avoids the lat­ter,” Roberts wrote.

(RE­LATED: The Truth About Obama­care’s “Double-Di­git” Premi­um In­creases)

The chal­lenge in King v. Bur­well centered on a sec­tion of the Af­ford­able Care Act that refers to sub­sidies flow­ing through “an ex­change es­tab­lished by the State.” That line means sub­sidies can­not be made avail­able to people who live in states that re­lied on the fed­er­al gov­ern­ment to run their ex­changes, the chal­lengers ar­gued.

That’s too nar­row a read­ing, and it doesn’t square with the con­text of the stat­ute as a whole, Roberts wrote.

He poin­ted to many of the same pro­vi­sions the Justice De­part­ment had cited in its briefs. For ex­ample, the law dir­ects states to set up ex­changes, then says the fed­er­al gov­ern­ment should step in to set up “such ex­change” in the states that don’t do it them­selves.

“By us­ing the phrase ‘such Ex­change,’ [the law] in­structs the Sec­ret­ary to es­tab­lish and op­er­ate the same Ex­change that the State was dir­ec­ted to es­tab­lish. “¦ In oth­er words, State Ex­changes and Fed­er­al Ex­changes are equi­val­ent—they must meet the same re­quire­ments, per­form the same func­tions, and serve the same pur­poses,” Roberts wrote.

If sub­sidies wer­en’t avail­able in states that did not run their own ex­changes, premi­ums likely would have skyrock­eted in those mar­kets—even for people who didn’t get their in­sur­ance through Obama­care. Roberts’s de­cision ex­plained that out­come at length and agreed with the Justice De­part­ment’s claim that Con­gress could not have in­ten­ded to im­pose that kind of chaos.

“The stat­utory scheme com­pels us to re­ject pe­ti­tion­ers’ in­ter­pret­a­tion be­cause it would destabil­ize the in­di­vidu­al in­sur­ance mar­ket in any State with a Fed­er­al Ex­change, and likely cre­ate the very ‘death spir­als’ that Con­gress de­signed the Act to avoid,” Roberts wrote.

He even cited the dis­sent from his 2012 rul­ing on the in­di­vidu­al man­date, in which the Court’s con­ser­vat­ive justices ex­plained that “without the fed­er­al sub­sidies, … the ex­changes would not op­er­ate as Con­gress in­ten­ded and may not op­er­ate at all.”

Justice Ant­on­in Scalia, in a scath­ing dis­sent joined by Justices Samuel Alito and Clar­ence Thomas, ac­cused the ma­jor­ity of “in­ter­pret­ive jig­gery-pokery.” A strict read­ing of the words “es­tab­lished by the State” should have settled the is­sue eas­ily, Scalia ar­gued.

But Roberts, again echo­ing the law’s al­lies, said vari­ous in­tric­a­cies of the law’s core struc­ture make that read­ing too re­strict­ive.

“These pro­vi­sions sug­gest that the Act may not al­ways use the phrase ‘es­tab­lished by the State’; in its most nat­ur­al sense,” Roberts wrote. “Thus, the mean­ing of that phrase may not be as clear as it ap­pears when read out of con­text.”

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