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Could the Supreme Court Give Congress and the States Enough Time to Fix Obamacare? Probably Not.
Guest Blogger
Timothy Jost
Yesterday's Supreme Court argument in King v. Burwell went
largely according to script.Michael
Carvin, cheered on by Justices Scalia and Alito, pressed his argument that a
federally facilitated exchange cannot conceivably be an “exchange established
by the state,” and cannot, therefore, possibly issue premium tax credits because
a subsection of the section on computing those credits refers to exchanges
“established by the state.”
Solicitor General Verrilli, on the other hand, aided by
Justices Sotomayor, Ginsburg, Kagan, and Breyer, pointed out that if one reads
the statute as a whole, it becomes clear that federally facilitated exchanges
are the exact equivalent of state-operated exchanges, with all the same powers.Moreover, as Justices Sotomayor and Kennedy
pointed out, accepting the plaintiffs’ reading of the statute would raise
serious questions of unconstitutional coercion of the states, which would face
the destruction of their insurance markets effectively without warning.
There was, however, one big surprise in the argument.About an hour in, Justice Alito said in
response to the Solicitor General’s description of the chaos a judgment for the
plaintiff would cause:
Would it not be possible if we were to adopt
Petitioners' interpretation of the statute to stay the mandate until the end of
this tax year as we have done in other cases where we have adopted an
interpretation of the constitutional -- or a statute that would have very
disruptive consequences such as the Northern Pipeline case?
While there has been some discussion regarding Congress
enacting delaying legislation if the Court comes down on the side of the
plaintiffs, the possibility of the Court itself delaying its mandate has not
been widely considered.Solicitor
General Verrilli appropriately questioned the legality of this
possibility.Article I, Section 9, of
the Constitution prohibits the expenditure of funds from the Treasury except by
lawful appropriation.Although the
Supreme Court has from time to time delayed the effective date of its
judgments, authorizing expenditures that it has decided are illegal is quite another
matter.
But the possibility of a brief reprieve from a death
sentence for the federally facilitated exchanges in 34 states raises profound practical problems
as well.Presumably the idea is that
this would give states time to establish exchanges of their own.A Supreme Court decision is unlikely,
however, to come down until late June. Federal regulations require states to
give the federal government six and a half months’ notice before switching from
a federally facilitated to a state exchange, and current guidance would require
states to notify the federal government by May 1 if they wanted to operate
their own exchange by January 1, 2016.
Moreover, by late June, legislatures in most states will
no longer be in session, while in a number of states governors are legally
prohibited from establishing exchanges without permission from the legislature.
Federal establishment grants, which proved vital to helping states that
currently operate exchanges to establish them, are no longer available as of
2015.Also as of 2015, state exchanges
must be self-supporting, without federal operating support.Finally, in many, probably most, Republican
states, neither the legislature nor governor is politically open to setting up
a state exchange.
Insurers will also find a reprieve of a few months
unhelpful.Under federal rules, insurers
must file their 2016 rates by May 15, 2015.In some states insurers may have up until August to revise their 2016 rates,
but a Court decision in late June is simply not going to allow enough time for
insurers to set rates for 2016 and for states to approve them.With the great likelihood that premium tax
credits will no longer be available in 34 states as of January 1, insurers
would likely forego exchange participation for 2016 and, where they can, raise
their rates drastically in the individual market outside the exchange.
Of course, Congress could always take action to fix the
problem, but as the Solicitor General asked at the oral argument, “This
Congress?” (followed by laughter).There
is no escaping the fact that a decision for the plaintiffs will be a
disaster—for lower and moderate income Americans who depend on premium tax
credits, for Americans who purchase insurance in the individual market where
premiums would increase dramatically, for insurers, and for health care
providers.No one should be under any
illusion that a brief delay in the effective date of the Court’s decision can
in any way ameliorate that disaster.
Timothy S. Jost is Robert L. Willett Family Professor of Law at
Washington and Lee School of Law. You can reach him by e-mail at JostT
at wlu.edu