The Supreme Court’s decision to hear King v. Burwell means that the Court, for the second time in three years, will be deciding an issue that will have a major impact on the Obama Administration’s ability to implement the Affordable Care Act. The ACA’s requirement that individuals purchase health insurance or else pay a penalty barely survived a constitutional challenge in June 2012 when the Court voted 5-4 in NFIB v. Sebelius to uphold the mandate as a proper exercise of Congress’s power under the Taxing Clause. The claim raised in King—that individuals who purchase insurance on the federal government’s healthcare exchange are not entitled to the tax subsidies available to those purchasing on state exchanges—would, if accepted by the Court, have an impact on the ACA every bit as great as a decision striking down the individual mandate. That fact has caused some commentators to draw spurious parallels between the two cases. Many Obamacare partisans who dismissed the NFIB constitutional challenge as a “shameful” and hypocritical “solicitation of right-wing judicial activism,” are making the same accusation against the King challenge.
The accusations were inaccurate in NFIB; they are hopelessly wrong when applied to King. Before such unfounded criticism of King takes hold, it is important to emphasize major distinctions between the two cases. The petitioners in NFIB were asking the Court to take a decisive step: to strike down legislation adopted by Congress and signed by the President. Those petitioners, in my opinion, raised highly plausible (and indeed, partially successful) arguments in support of their constitutional claims. However, a majority of the justices—mindful of separation-of-powers concerns that arise whenever they are asked to override the will of Congress and the President—followed the Court’s long-held preference that, in the words of Chief Justice Roberts, “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.”
King implicates no similar separation-of-powers concerns. If, as the plaintiffs argue, the IRS has adopted an unreasonable interpretation of the ACA’s tax subsidy provision, the Court is obligated to uphold the meaning Congress actually adopted in the ACA. It is not entirely implausible to argue that the IRS has reasonably interpreted the statute. But—as is attested to by the conclusions of at least three federal judges, including well-respected D.C. Circuit judges Thomas Griffith and A. Raymond Randolph—there is a strong basis for concluding that the phrase “an Exchange established by the State” does not include a healthcare exchange established by the federal government. Accordingly, a decision concluding that the IRS misinterpreted the statute’s meaning could not rationally be chalked up to “right-wing judicial activism.”
Obamacare supporters might well be correct that a desire to cut back on federal government intervention in the health insurance field motivates the King plaintiffs to a significant degree. But that motivation does nothing to undermine the validity of their statutory claims or their showing that the IRS’s alleged misinterpretation has caused them injury. The Court is merely being asked to interpret the meaning of a statute adopted by Congress, a task that ever since Marbury v. Madison has been well understood to be an appropriate exercise of judicial power. (“It is emphatically the province and duty” of the courts “to say what the law is.”).
Nor can Obamacare partisans legitimately accuse the Court of activism for agreeing to hear King in the absence of an existing split of authority among the federal appeals courts. The assertion that there is no split is subject to question: a D.C. Circuit panel issued a decision this summer rejecting the IRS’s interpretation; and while the en banc D.C. Circuit (newly packed with Obama appointees) agreed to rehear the case, it has never formally withdrawn the panel opinion. Besides which, the King petitioners pointed out, there were other compelling reasons for the Court to address the issue as soon as possible. While any decision striking down the IRS’s interpretation will cause disruption in the health insurance marketplace, the extent of the disruption will only increase the longer an erroneous interpretation remains in effect. If, as the Supreme Court apparently deemed likely, the numerous judicial challenges to the IRS’s interpretation would give rise to a clear circuit split that only the Court could resolve, it is far preferable for the Court to intervene now and thereby minimize any potential disruption.
Also published by Forbes.com on WLF contributor page