“The Supreme Court has the opportunity to reaffirm the principle that the law is what Congress enacts, not what the administration or others wish Congress had enacted with the benefit of hindsight. Granting tax credits to those who need help purchasing health insurance may be a good idea…
…and may have bipartisan support, but the I.R.S. lacks the authority to authorize such tax credits where Congress failed to do so.” Jonathan H. Adler, law professor at Case Western Reserve University and one of the architects of the new challenge
“As I understand it, it’s generally standard practice for Congress to amend or correct massive legislation like the Affordable Care Act (to improve its implementation). That being said, President Obama and the pre-2010 Democratically-controlled Congress enacted ACA knowing their Republican opposition was vehemently opposed. As a result, ACA, a massive change to 1/6th of our economy affecting every American citizen occurred without a single Republican vote. I believe, and I think most Americans agree, major changes to our way of life should be bipartisan given how evenly the country is politically divided these days. That is why I think the Republicans in Congress (I’m an independent) are fully in their right to deny any amendments/corrections to ACA and challenge (in the courts) President’s Obama’s arbitrary interpretation and selective enforcement/implementation, as violating the Rule of Law (the plain reading of the text of the ACA law). It would be unfortunate if some Americans are hurt by these events, but upholding The Rule of Law and our Constitution is far more important than the ACA.” Mike Perry
Justices to Hear New Challenge to Health Law
By ADAM LIPTAK
The Supreme Court will again hear arguments about the Affordable Care Act, this time focusing on the language of one passage. Credit Jabin Botsford/The New York Times
WASHINGTON — The Supreme Court on Friday agreed to hear a new challenge to the Affordable Care Act, potentially imperiling President Obama’s signature legislative achievement two years after it survived a different Supreme Court challenge by a single vote.
The case concerns tax subsidies that currently help millions of people afford health insurance under the law. According to the challengers, those subsidies are being provided unlawfully in three dozen states that have decided not to run the marketplaces, known as exchanges, for insurance coverage.
If the challengers are right, people receiving subsidies in those states would become ineligible for them, destabilizing and perhaps dooming the law.
The Obama administration said it would mount a vigorous defense in the Supreme Court.
“This lawsuit reflects just another partisan attempt to undermine the Affordable Care Act and to strip millions of American families of tax credits that Congress intended for them to have,” said Josh Earnest, the White House press secretary. “We are confident that the financial help afforded millions of Americans was the intent of the law and it is working as Congress designed.”
Scott Pruitt, Oklahoma’s attorney general, said he welcomed the Supreme Court’s decision to hear the case. The administration, he said, “cannot ignore the plain language in a statute and rewrite laws with which they disagree.” He added, “This Supreme Court review will provide Oklahoma and the 35 other states that did not establish state-based exchanges with immediate and conclusive clarity as to their rights and obligations under the A.C.A. so that the states may make appropriate health care policy decisions.”
The case is likely to be argued in February or March, and a decision will probably arrive in June, three years after the court ruled that Congress had acted constitutionally in enacting the law.
In a supporting brief urging the court to hear the case, several Republican lawmakers said the law as currently enforced would result in “tens of billions of dollars of unlawful spending in the next year, and hundreds of billions over the next decade.”
Representative Nancy Pelosi, the House minority leader, said the court’s move was a surprise. “It’s troubling that they would even consider this,” she said. “The language is very clear. The intent of Congress is very clear.”
The central question in the case, King v. Burwell, No. 14-114, is what to make of a provision in the law limiting subsidies to “an exchange established by the state.” (If states do not establish their own exchanges, the health care law requires the federal government to run them instead.)
The challengers say the provision means that only people in states with their own exchanges can get subsidies. Congress made the distinction, they say, to encourage states to participate.
But the Internal Revenue Service has issued a regulation saying subsidies are allowed whether the exchange is run by a state or by the federal government. The challengers say that regulation is at odds with the law.
In response, Solicitor General Donald B. Verrilli Jr. told the justices that the I.R.S. interpretation was correct, while the one offered by the challengers was “contrary to the act’s text and structure and would render the act unrecognizable to the Congress that passed it.”
Health insurance companies reacted cautiously to the announcement. “This issue is now in the hands of the justices, but it’s clear that significant policy changes would be required to ensure an affordable and stable market for consumers were the court to rule against the government,” Clare Krusing, the director of communications for America’s Health Insurance Plans, the industry trade group, said in a statement.
Jonathan H. Adler, a law professor at Case Western Reserve University and one of the architects of the new challenge, said the administration’s approach may be good policy, but is contrary to the plain terms of the law.
“The Supreme Court has the opportunity to reaffirm the principle that the law is what Congress enacts, not what the administration or others wish Congress had enacted with the benefit of hindsight,” Mr. Adler said. “Granting tax credits to those who need help purchasing health insurance may be a good idea, and may have bipartisan support, but the I.R.S. lacks the authority to authorize such tax credits where Congress failed to do so.”
The case the Supreme Court agreed to hear comes from Virginia. It was brought by four people who said they did not want to be subject to the law’s requirement that they buy insurance or pay a penalty. If it was not for the subsidies, they said, they would have been eligible for a hardship exemption.
In July, the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., ruled against the challengers.
Judge Roger L. Gregory, writing for a three-judge panel of the court, said the contested phrase was “ambiguous and subject to multiple interpretations.” That meant, he said, that the I.R.S.’s interpretation was entitled to deference.
That same day, a divided three-judge panel of the United States Court of Appeals for the District of Columbia Circuit ruled the other way, agreeing with the challengers that only people in states that run their own exchanges are eligible for subsidies.
“We reach this conclusion, frankly, with reluctance,” Judge Thomas B. Griffith wrote for the majority. “Our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal exchanges and for health insurance markets more broadly. But, high as those stakes are, the principle of legislative supremacy that guides us is higher still.”
In dissent, Judge Harry T. Edwards said the case was a “not-so-veiled attempt to gut” the health care law.
The Supreme Court often steps in when federal appeals courts have disagreed. But the split between the two courts was wiped out in September when the full District of Columbia Circuit vacated the July ruling and set the case for argument in December.
The challengers urged the Supreme Court to intercede anyway, saying that the sums involved are huge and that individuals, employers, insurers and states need a prompt and definitive resolution.
It takes only four votes to add a case to the Supreme Court’s docket. They may have come from the four members of the court who were ready in 2012 to strike down the Affordable Care Act: Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito Jr. Once again, it seems, the fate of the law may rest with Chief Justice John G. Roberts Jr.
As is the Supreme Court’s custom, its one-sentence order did not disclose the justices’ votes and gave no reason for the decision to hear the case, which came just before the health care law’s open enrollment period is set to start next week.
Mr. Earnest, the White House press secretary, said the court’s move has not, for now at least, altered the status quo.
“American families who have already enrolled, or are planning to sign up during the open enrollment period beginning on Nov. 15, should know that nothing has changed,” he said. “Tax credits and affordable coverage remain available.”
The question now is whether six words in the law contain the seeds of its destruction.
Reed Abelson contributed reporting from New York.
A version of this article appears in print on November 8, 2014, on page A1 of the New York edition with the headline: Justices to Hear New Challenge to Health Law.