New York Times

On Wednesday morning, the United States Supreme Court will hear arguments in King v. Burwell, the case that could decide the fate of the Patient Protection and Affordable Care Act, the landmark “Obamacare” legislation passed by Congress in 2010. Emily Bazelon, a staff writer for SLATE magazine, and Adam Liptak, The Times’s Supreme Court correspondent, have been exchanging emails about what’s at stake in the case and how the court might approach its decision.

Hi, Adam,

Here we are, nearly three years after the Supreme Court refrained from killing Obamacare, wondering if the court will save the law from a second legal challenge. The case is King v. Burwell. For those who have not been following its progress as obsessively as we have, the case is about whether the Affordable Care Act provides subsidies to everyone in the country who qualifies for them on the basis of income level, whether they get their insurance through a state-run exchange or an exchange run by the federal government.

After the Affordable Care Act was passed into law in 2010, 34 states opted for federally-run exchanges, instead of setting up their own. They did this for a variety of reasons: cost, flexibility, political opposition to the law. More than nine million people in these states now receive subsidies, to the tune of about $3,000 per person, according to a study by the Urban Institute. If the plaintiffs prevail, the federal government will not be able to provide subsidies to anyone buying health insurance through a federally-run exchange. Many of those nine million people would presumably pull out of the exchanges, driving up the prices for whomever is left, and the exchanges could collapse. That’s what is concretely at stake in this case.

Also at stake: how the Supreme Court reads statutes. No one here is invoking the Constitution or any other lofty document or principle. Instead, the fight is over the humble, everyday practice of statutory interpretation, by which courts figure out the meaning of a law written by a legislature. Thechallengers in King say that four words in the Affordable Care Act’s hundreds of pages — “established by the state” — mean that subsidies are available only through state-established exchanges. In other words, those four words mean what they say. Easy case.

Or here’s another way to read those words: in broad context. Viewed as a whole, the Obama administration argues, the Affordable Care Act makes clear throughout its text that subsidies are available in every state, to every citizen who qualifies for them, regardless of whether states set up their own exchanges or relied on the federal government to do that for them.

As Linda Greenhouse has pointed out in The Times, just about every justice is on the record in support of reading the words in a statute in “the broader context of the law as a whole,” as Justice Clarence Thomas put it in 1997. Read as a whole, the act provided for subsidies everywhere, as the Congressional Budget Office assumed in estimating the cost of the law. That is what the Internal Revenue Service assumed in passing its rule about who can get a subsidy, in the form of a tax credit. As you, Adam, show in a great article about the origins of this lawsuit, it wasn’t until December 2010, nine months after the Affordable Care Act was passed, that the law’s critics first noticed the “established by the state” phrasing and seized on its potential to wreck Obamacare.

Again, easy case.

My opening question: What matters for choosing between these two conflicting outcomes and methods of statutory interpretation? Should the court read “established by the state” literally, because that’s what judges are supposed to do? Or should they read that phrase in relation to the rest of this doorstop of a law, whose survival clearly relies on the availability of subsidies in every exchange in every state?

—Emily

Emily,

There is a third choice.

As you say, the challengers start with a plain-language argument that will appeal to the conservative side of the court. Those justices might think that it’s one thing to read a provision in the context of a sprawling law to try to discern its meaning and another to interpret it to mean the opposite of what it seems to say. The government’s best response to the narrow textual argument was to call the phrase a “term of art.” The challengers have some fun with this in their reply brief: “It would certainly be convenient, for an agency seeking to rewrite a statute, if an English phrase can become a term of art on the government’s mere say-so.”

You may be right, too, that the government has the better of the arguments once you consider the phrase in the broader context of the law’s other provisions, structure and goals. But the truth is that the Affordable Care Act is riddled with anomalies that are a testament to its rushed passage, and there is a disingenuous quality to both sides’ insistence that it is a harmonious whole that rivals a Swiss watch in its fine calibration.

That brings us to the third choice, one that gets surprisingly little play in the briefs. The Supreme Court has a solution for dealing with an ambiguous law: It defers to the interpretation of the government agency charged with enforcing it. Lawyers call this “Chevron deference,” after a foundational 1984 decision. Here, as you said, the relevant interpretation is that of the I.R.S. — and the I.R.S. interpreted the law to allow the subsidies nationwide.

This was the ground on which the government won in the United States Court of Appeals for the Fourth Circuit. That court refused to choose between your two alternatives. “Simply put,” it said, “the statute is ambiguous and subject to at least two different interpretations.”

But the appeals court let the I.R.S. be the tiebreaker, saying the agency had “crafted a rule ensuring the credits’ broad availability and furthering the goals of the law.” That was a permissible interpretation of an ambiguous law, the court said, and it was entitled to deference.

— Adam

Adam,

Yes, score one for Chevron, the “most cited administrative-law case in history”! (I used King as an excuse to go on at length about it here.) Chevron tells courts to defer to agency readings of an ambiguous statute — as long as the agency is being reasonable — because agencies know more than the courts and are more accountable to voters. “Judges are not experts in the field and are not part of either political branch of the government,” Justice John Paul Stevens explained in his majority opinion in the case.

Let’s talk about another political part of government: the states. Two of the most interesting and important friend-of-the-court briefs filed in this case come from dueling groups of states. Six states, led by Attorney General Scott Pruitt of Oklahoma, say that it “came as no surprise” to them that Congress made subsidies available only through state-run exchanges. Congress was trying to “entice” the states to set up their own exchanges, and this “conditioning of tax credits was the primary means of doing so.” The six states point out that in November 2012, two months before the deadline for establishing state exchanges, Pruitt challenged in court the I.R.S. rule granting subsidies through federally run exchanges. The other states on Oklahoma’s side are Alabama, Georgia, Nebraska, South Carolina and West Virginia. Indiana filed a separate brief that takes a similar position.

On the other side are 22 states yelling “Yikes!” They have federally run exchanges, and they say they never thought that going this route would make their residents ineligible for subsidies. They have many statements from state officials to prove that they were taken unawares. Former Gov. Bob McDonnell of Virginia said he knew of no “clear benefits of a state-run exchange to our citizens.” Former Gov. Pat Quinn of Illinois said residents of his state “deserve all the benefits afforded to them” by the law. The Washington State Health Care Authority said that tax credits would “accrue to every state regardless of how the state implements an exchange.”

“On the key issues,” former Gov. Dave Heineman of North Dakota said in November 2012, “there is no real operational difference between a federal exchange and state exchange.” Even the advisory committee for a health insurance exchange in Georgia, a state that signed Oklahoma’s opposing brief, reported to the governor that “Georgians will be eligible for these subsidies whether [an exchange] in Georgia is established by the state or federal government.”

In the first case the Supreme Court decided about the legality of the A.C.A., in 2012, 26 states asked the justices to find the law unconstitutional. The long list included Iowa, Maine, Mississippi, North Dakota, Pennsylvania and Washington. This time, the numbers are on the other side. The 22 states asking the Supreme Court to let their residents keep their subsidies include these six, and nine of the 22 states have Republican governors. Which leads to the question I’ll leave you with: How much do you think the states’ views, on both sides, will influence the justices?

—Emily

Emily,

I’m not sure how much statements from state officials about what they thought or understood will count with the court. The justices usually have no use for after-the-fact statements from legislators about what they intended when they drafted or voted for statutes, and the state officials’ statements may strike a similar chord. But the court is quite interested in “cooperative federalism,” which is what the two sets of states are arguing about.

The challengers say the point of the subsidies was to entice — or perhaps coerce — states into establishing their own exchanges. Such incentives are not unusual in federal statutes aimed at making states do things they cannot be forced to do.

No one disputes that the health-care law contained one such set of incentives, concerning the expansion of Medicaid. (In the 2012 health-care case, the Supreme Court, by a 7-to-2 vote, said the law had gone too far by threatening to withhold all Medicaid money, old and new, unless states complied.)

Were the tax subsidies at issue in the new case meant to accomplish something similar? There are reasons to wonder. The threat that the subsidies were at risk was awfully well hidden, and secret threats are not usually effective. The threat was directed, moreover, not at the states themselves but at their residents. And the threats, if that is what they were, failed spectacularly, with more than two-thirds of the states opting out of creating an exchange.

The challengers’ reply brief argues that it was the I.R.S. rule that emboldened the states not to establish exchanges. “Had the I.R.S. from the start made clear that subsidies were limited to state exchanges,” the brief said, “states would not have overwhelmingly refused to establish them.”

This is where supporters of the law started to lose their minds. Rob Weiner said on the blog of the American Constitution Society that he could not fathom “the bizarre assertion that the I.R.S. rule preventing insurance death-spirals in state markets is responsible for the death-spirals the absence of the rule will produce.”

The justices will, I suspect, try to adjudicate this dispute about cooperative federalism. Justice Anthony M. Kennedy, in particular, cares about the balance of state and federal power, and his assessment of the competing arguments will help determine his vote.

But we haven’t talked about the most crucial vote: Where do you think the chief justice is heading?

—Adam

Adam,

Ah, the chief justice: man of Obamacare mystery, who reportedly swooped in at the final hour in 2012 to snatch the law from the jaws of the court’s other four conservatives. The cynic in me wonders if Chief Justice John G. Roberts Jr. got political cover to kill Obamacare when the court decided to hear a same-sex marriage case later this term. By pairing the axing of health-insurance subsides with a ringing civil-rights victory for gay couples, the court would appear more moderate than it would if it ended the term just killing Obamacare. Plus Roberts could write an opinion pointing out that if Congress wanted the residents of every state to get subsides, it could fix the statute to say so. That’s the rhetorical approach the chief justice took in dismantling a core part of the Voting Rights Act two years ago.

On the other hand, the end of subsidies for millions of people would be a thunderclap that the court couldn’t muffle (as a few Republicans in Congress are beginning to acknowledge). The political climate was a lot more receptive to killing the Affordable Care Act the first time the court’s conservatives had the chance; at the time, 26 states were urging them to do so. Now only seven are. Judges don’t vote by the polls, but that doesn’t mean they are walled off from real-world implications.

One more point about the states: You’re right, of course, that the court doesn’t usually care what legislators say about the meaning of statutes after they’ve drafted them. But the states aren’t the drafters here. They are Congress’s partners — whether they like it or not — in the Affordable Care Act. Conservatives are usually the ones who worry about the states’ end of the cooperative-federalism bargain. If Congress wanted the states to set up their own exchanges or else, Congress should have used italics, if not capital letters in bold. Laws aren’t supposed to play tricks, especially on the people who have to implement them.

—Emily