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March 05, 2015 at 06:26 AM
(Bloomberg View) — The chances of the Patient Protection and Affordable Care Act (ACA) surviving its latest legal challenge seem much brighter after Wednesday’s oral argument at the Supreme Court.
For those who haven’t been following King vs. Burwell (Case Number 14-114), at issue is whether the law allows the federal government to subsidize the cost of Obamacare coverage in states that chose not to build their own insurance exchanges — instead letting the federal government do it for them. The plaintiffs argue that a clause in the law says tax credits apply only to exchanges “established by the state,” precluding tax credits on exchanges run by the federal government. The Barack Obama administration says looking at the law as a whole shows that’s not the case.
The justices’ questions offer some support for the law’s supporters. At this point the government has four paths to victory; the challengers have only one.
The government’s first chance is remote: The court could send the case back to the lower court to investigate whether the plaintiffs have been injured — what’s known as having standing. The reality of their injury has been seriously questioned in the media and the justices also raised questions, but the court seemed eager to move on to the merits.
The government’s second defense, and its primary argument, is more promising: If the court considers the entire text of the statute and not just a single phrase, it’s clear that Congress intended federally facilitated exchanges to effectively become the exchange in states that chose not to operate one themselves.
There are more than 50 provisions of the law that don’t work if federal exchanges can’t grant premium tax credits. Today’s argument mentioned only a few, but made clear that the statute as a whole authorizes federal exchanges to grant tax credits.
