New York Times

Supreme Court Seems Sharply Split in Case on Health Law

March 7, 2015

by Adam Liptak

WASHINGTON — The Supreme Court on Wednesday seemed bitterly divided during heated arguments over the fate of President Obama’s health care law.

The court’s four liberal members voiced strong support for the administration’s position. But the administration must almost certainly capture the vote of either Chief Justice John G. Roberts Jr. or Justice Anthony M. Kennedy to prevail.

The chief justice said almost nothing.

Justice Kennedy asked questions suggesting that he was uncomfortable with the administration’s reading of the statute. But he added that the challengers’ reading posed problems, too.

“Your argument raises a serious constitutional question,” he told their lawyer.

Solicitor General Donald B. Verrilli Jr. argued for the Obama administration, facing Michael A. Carvin, who represented the plaintiffs in another challenge to the law that reached the Supreme Court in 2012.

The argument, which lasted 80 minutes rather than the usual hour, started with a presentation from Mr. Carvin that was tied closely to the text of the law.

“This is a straightforward question of statutory interpretation,” he said, referring to a provision in the law that seems to say that subsidies are available only to people living where the insurance marketplaces, known as exchanges, had been “established by the state.”

Mr. Carvin faced a barrage of questions from the court’s liberal wing focusing on the health care law as a whole.

“We don’t look at four words,” Justice Elena Kagan said. “We look at the whole text.”

Justice Stephen G. Breyer echoed the point.

“If you want to go into the context” of the law, he told Mr. Carvin, “at that point your argument really is weaker.”

Justice Sonia Sotomayor said Mr. Carvin’s reading of the law would have devastating consequences. “We’re going to have the death spiral that this system was enacted to avoid,” she said.

Justice Kennedy repeatedly asked whether Congress had the constitutional authority to make states choose between setting up their own insurance exchanges and letting their citizens lose tax subsidies to help them buy insurance.

“There is a serious constitutional problem here if we adopt your position,” he told Mr. Carvin.

Justice Kagan made a similar point, saying that a properly drafted law would have made the choice more stark. “That’s not the clarity with which we expect the government to speak when it’s upsetting federal-state relations,” she said.

Both lawyers discussed whether the four Virginians challenging the law had suffered the sort of direct injury that gave them standing to sue. But the court did not seem likely to dismiss the case on standing grounds.

Mr. Verrilli said the challengers’ interpretation “produces an incoherent statute that doesn’t work.”

Justice Antonin Scalia responded that the law “means what it says” even if that has negative consequences. He and Justice Samuel A. Alito Jr. added that Congress and the states could promptly address a ruling rejecting the subsidies. Justice Alito said the Supreme Court might even defer the effective date of its decision.

Justice Kennedy, who had asked tough questions of Mr. Carvin, did not seem satisfied with Mr. Verrilli’s argument either. Mr. Verrilli’s reading of the law, Justice Kennedy said, “seems to me to go in the wrong direction, not the right direction, for your case.”

The court’s decision, expected by late June, will determine whether roughly seven million low- and middle-income people in some three dozen states will continue to receive subsidies to help them buy health insurance.

Should the court rule that the subsidies were not authorized by the health care law, most of those people would no longer be able to afford insurance. And insurance markets in those states could collapse, imperiling the health care law itself.

The central question in the case, King v. Burwell, No. 14-114, is whether the Affordable Care Act bars the subsidies in places where the federal government, rather than the state, runs the insurance marketplaces called for by the law.

The law’s defenders say its structure and purpose make clear that it called for subsidies in all 50 states.

The four people from Virginia challenged an Internal Revenue Service regulation allowing the nationwide subsidies. Without the regulation, they said, they would have qualified for a hardship exemption from the law’s requirement that they obtain insurance or pay a penalty.

The Supreme Court upheld that requirement in 2012 by a 5-to-4 vote.