Obamacare survives second court challenge

WASHINGTON—Chief Justice John Roberts came to Obamacare’s rescue again, three years after upholding the individual mandate at the heart of the law. Inside the courtroom, fuming in the seat next to Roberts, Justice Antonin Scalia delivered a memorably brutal dissent arguing that “words no longer have meaning.”

Scalia, citing Roberts' 2012 ruling upholding Obamacare’s individual mandate and Roberts' ruling today upholding another key provision in the law, quipped that the law should be known as “SCOTUScare.”

Roberts isn’t entirely responsible for the ruling today. Unlike the 2012 ruling where he was the deciding vote, this time Justice Anthony Kennedy sided with Roberts, making the vote 6-3 to uphold a key provision in the law. Justices Clarence Thomas and Samuel Alito joined Scalia in his dissent.

The case concerned four words in the Affordable Care Act about providing tax subsidies for insurance purchased on exchanges “established by the state.” Under that plain language, the challengers argued people in the 34 states where the federal government operates exchanges, instead of the states, were not eligible for tax subsidies. Only 16 states have established their own exchanges.

Of the 7.3 million people who have purchased insurance on the exchanges, 6.4 million have received subsidies. Without the subsidies, the government argued insurance markets in most states would go into a “death spiral” as healthy people dropped out of expensive insurance pools, leaving only the sick.

The challengers argued the subsidies were meant as an incentive for states to set up their own exchanges. The government argued the context of the law shows Congress wanted everyone to be eligible for subsidies regardless of what states decided.

As Roberts began summarizing his ruling from the bench, it was at first unclear what his ruling would be. But Scalia grimaced at each sentence and rocked in his seat, signaling what was coming. Thomas had his hand on his forehead.

“Our duty is to construe statutes, not isolated provisions,” Roberts said. “We must look at the broader structure of the act to determine its correct meaning.”

Roberts discussed the healthcare law’s hurried passage in 2010, saying “the Affordable Care Act contains more than a few examples of inartful drafting.” He said it was “implausible” that Congress wanted to send state health insurance markets into “death spirals.”

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” he wrote. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter. Section 36B [the section on exchanges] can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.”

When Roberts finished reading his summary of the opinion, he said Scalia had a dissenting opinion.

“Indeed,” Scalia said, launching into a remarkably barbed dissent in which he called Roberts’ reasoning “pure applesauce” and “interpretive jiggery-pokery.”

Scalia said it was “absurd” that “an exchange established by the state” means “an exchange established by the state or the federal government.” If Congress made a drafting error, he argued, Congress should fix it.

“The court predicts that making tax credits unavailable in states that do not set up their own exchanges would cause disastrous economic consequences there,” he wrote. “If that is so, however, wouldn’t one expect states to react by setting up their own exchanges? And wouldn’t that outcome satisfy two of the act’s goals rather than just one: Enabling the act’s reforms to work and promoting state involvement in the act’s implementation?”

Roberts listened with furrowed brow as Scalia read but laughed when Scalia called Obamacare “SCOTUScare.” In his dissent, Scalia employed various theatrical asides: “Contrivance, thy name is an opinion on the Affordable Care Act! … Understatement, thy name is an opinion on the Affordable Care Act! … Impossible possibility, thy name is an opinion on the Affordable Care Act!”

Scalia drew parallels between Roberts’ strained interpretation of the individual mandate penalty as a “tax,” and his interpretation of state exchanges as including federal exchanges.

“Under all the usual rules of interpretation, in short, the government should lose this case,” Scalia wrote in his dissent. “But normal rules of interpretation seem always to yield to the overriding principle of the present court: The Affordable Care Act must be saved.”

While many Republicans criticized the ruling and Roberts, even Republican-led states didn’t want to lose federal subsidies. They had done little to create their own exchanges ahead of the court ruling. Only Pennsylvania, Delaware, and Arkansas had begun to move from a federal to a state exchange ahead of the ruling. And only seven states of the 34 who hadn’t set up state exchanges filed on the side of the federal subsidy challengers.