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Thoughts on King v. Burwell and What's Next for the ACA

By Dr. David C. Pate, News and Community
March 10, 2015

It is a fool’s errand to guess the outcomes of cases based solely upon justices’ questions, but here’s what I think about last week’s oral arguments in King v. Burwell before the U.S. Supreme Court and what I suspect the outcome will be.

If you’re not familiar with this case and want to catch up, I’ve posted a previous entry about the case, which challenges whether insurance subsidies under the Affordable Care Act were available in states in which the federal government was running the insurance exchange, as opposed to the states that established their own state-operated exchanges. The private parties challenging the law argued they were not; the government argued that they were.

My prediction is based on my own understanding of the individual justices’ perspectives and my review of the transcript from the oral arguments in this case. The decision from the Court is expected in June.

My prediction:

The government wins in a 5-4 ruling. Deciding in favor of the government based upon a reading of the statute in whole, placing the language in question in context and aligning the interpretation with the overarching goals of the statute, will be Justices Stephen Breyer, Ruth Ginsburg, Elena Kagan, and Sonia Sotomayor.

Justice Anthony Kennedy will join the majority (he will actually create the majority) with a concurring opinion reaching the same outcome, but on different grounds.

He will conclude that under a literal interpretation of the statute, subsidies are available only to those who purchase insurance through an exchange established by the state and not by the government; however, he will go on to find that this provision would be unconstitutional because it is unduly coercive to states because their choice is only between establishing an exchange (which Congress cannot force states to do) or not allowing their state’s citizens the benefit of subsidies, and for those states that have a federally run exchange, facing the prospect of their citizens losing their subsidies, insurance rates rising precipitously, and their insurance markets entering a death spiral.

As a result, under the doctrine of “constitutional avoidance” (which means that the Court is to avoid interpreting statutes in a manner that makes them unconstitutional where possible), he will hold that the Court is therefore bound to accept the government’s interpretation that subsidies are available on all exchanges, in order to avoid finding this provision of the statute to be unconstitutional.

Voting in favor of the private litigants will be Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia, and Clarence Thomas, preferring a literal interpretation of the text of the statute that dictates that subsidies are only available to citizens of states that have established their own insurance exchanges and that a federally run exchange does not qualify.

They will avoid finding the provision unconstitutional, as Justice Kennedy will assert, by finding that the statute is not coercive and offers the kinds of incentives that are entirely permissible under federalism principles in order to encourage states to set up their own exchanges.

If my conclusion is correct and the decision is as I believe, there will be no fundamental change to the ACA. The subsidies will stand and the current exchange practices will remain intact.

And while there may continue to be nibbling around the edges of the ACA, the only real area of activity will be around Medicaid. That’s of particular interest to us in the state of Idaho, and I’ll keep blog readers posted there as well.

When the decision comes out, we’ll see how my prediction held up to reality!


About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.