A U.S. Supreme Court justice generally viewed as liberal today came out against the idea of Congress sneaking a provision requiring states to set up health insurance exchanges into a statute.
If Congress wants to try to coerce states into setting up health insurance exchanges, it should say so openly, and not do so in an indirect fashion, according to Justice Sonia Sotomayor.
Sotomayor and a colleague viewed as a potential swing voter, Justice Anthony Kennedy, talked about the coercion issue today during oral arguments at the court on King vs. Burwell (Case Number 14-114).
The PPACA opponents who brought the case say the plain language of the Patient Protection and Affordable Care Act (PPACA) gives only PPACA health insurance exchanges established by states the ability to offer the PPACA premium tax credit. Exchanges established by the U.S. Department of Health and Human Services (HHS) have no ability to offer the tax credit, the petitioners say.
HHS Secretary Sylvia Burwell and other Obama administration respondents say the HHS exchanges can offer the tax credits.
If a state that refuses to set up its own exchange loses any ability for its residents to get PPACA premium tax credits, and, at the same time, will come under the PPACA commercial health insurance provisions, such as the provisions requiring individual health insurers to sell coverage without using consumers’ personal health information, or using information other than age and tobacco use in pricing, then PPACA will likely lead to a “death spiral,” or an ever-escalating cycle of market shrinkage and rate increases, Sotomayor said, according to the court’s oral arguments transcript.
“Tell me how that is not coercive in an unconstitutional way?” Sotomayor asked.
In a recent case, the court ruled that the Supreme Court tries to read a statute “in a way where we don’t impinge on the basic federal-state relationship,” Sotomayor said.
Kennedy later echoed Sotomayor’s argument. If the petitioners’ argument is correct, for a state to choose not to set up a PPACA exchange “is just not a rational choice,” he said. “They’re being coerced.”