“This should be an easy case. Frankly, it probably shouldn’t even have been taken up.”
That was President Barack Obama at the G-7 summit in Germany blasting the Supreme Court for daring to even question whether a key portion of the health care law should be enforced as written in the upcoming King v. Burwell decision.
At issue is a controversial Internal Revenue Service (IRS) rule that allows health care subsidies to be paid through federal exchanges.
The controversy is that the health care law only ever authorized subsidies to private insurers to be paid through the state exchanges, not the federal ones. By not setting up state exchanges, as 36 states have opted out of, whether some $800 billion a year of subsidies get distributed is very much in question.
The pending Supreme Court ruling will come after the D.C. Circuit Court of Appeals and the Fourth Circuit Court of Appeals had ruled in opposite directions on the Obama administration’s interpretation of the law.
The D.C. Circuit’s ruling was subsequently vacated and the case set to be heard again in an en banc hearing in December 2014 before the Supreme Court granted certiorari. Similar issues have also come up in the Pruitt v. Burwell case in the U.S. District Court for the Eastern District of Oklahoma, a case that struck down the federal exchange subsidies.
The government says that exchanges “established by [a] state” may also include exchanges established by the federal government. But the only way that might work, since the law never originally provided for them, would be because the law is somehow ambiguous, and so the IRS had deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984) in constructing the rule.
Now, this series of court rulings are many things, but easy is not one of them. As even the Fourth Circuit acknowledged in its ruling, it could not “ignore the common-sense appeal of the plaintiffs’ argument; a literal reading of the statute undoubtedly accords more closely with [the plaintiffs’] position,” and that “the [government has] the stronger position, although only slightly.”
In other words, it was a close call.
Both courts ruled that the plaintiffs indeed had standing to sue, and that the claims would be justiciable.
And as far as the Fourth Circuit goes, it had to first make the determination that the statute was ambiguous before determining that the government had deference in constructing the rule in light of that ambiguity.
A favorable ruling for the government then rests on the idea that the law is indeed ambiguous. In this context, barring Congressional action to change the law, only courts can determine its applicability one way or another.
Perhaps the government would prefer a ruling that says the law is not ambiguous at all. That the federal exchanges can distribute subsidies simply because the laws says they can.
But not a single court has come forward with that opinion. At best, the rulings favoring the government’s case say that the law is unclear as written.
Particularly with the contradictory rulings that initially came out of the circuit courts, and with more cases on the way, there clearly is a real question as to what the law means.
In other words, even if Obama winds up winning the case, the Supreme Court had to take it up in order to grant the government the deference it desperately seeks.
And this guy was supposed to be a constitutional law professor?
Robert Romano is the senior editor of Americans for Limited Government.