(Bloomberg) — U.S. Supreme Court Justice Anthony Kennedy voted to strike down the Patient Protection and Affordable Care Act (PPACA) three years ago. Now, he could be the law’s savior.
Kennedy on Wednesday emerged as a pivotal vote as the court weighed whether to strip more than 7 million Americans of the federal subsidies that helped them buy health insurance.
At several points during the hearing, on King vs. Burwell (Case Number 14-114), Kennedy said the challengers’ reading of the 2010 statute could violate states’ rights by coercing them to set up insurance marketplaces.
“There’s a serious constitutional problem if we adopt your argument,” he told the lawyer challenging the tax credits.
Kennedy’s questions suggested he was at least a potential fifth vote to back the administration’s argument that the law, President Barack Obama’s signature legislative achievement, provides the credits to purchasers in all 50 states.
“He’s definitely the justice who’s in play,” said Cory Andrews, a lawyer with the Washington Legal Foundation, which backs the challenge against PPACA.
The nine-member court’s four Democratic appointees all indicated they agreed with the administration. Chief Justice John Roberts, who cast the decisive vote to uphold the law against a constitutional challenge in 2012, asked only a handful of questions.
The fight turns on a four-word phrase in PPACA. The measure says people qualify for tax credits when they obtain insurance on an exchange “established by the state.”
Four Virginians say those words limit the credits to the states that have taken active steps to set up their own online marketplaces, known as exchanges, for people to buy insurance. The other states, mostly Republican-controlled, declined to do so and left the job to the federal government.
The Obama administration is urging the court to look beyond those four words to the rest of the act and its broad purpose of providing coverage to tens of millions of uninsured Americans.
Kennedy suggested several times that the challengers’ reading of the law was the more natural one. “Perhaps you will prevail on the plain words of the statute,” he told Michael Carvin, the lawyer representing the challengers.
The problem for Kennedy stemmed from what that interpretation would mean. The administration says eliminating tax subsidies would render insurance unaffordable for millions of people, leaving only the sickest and most desperate in the market and sending rates surging upward.