On March 4, the Supreme Court heard oral arguments in King v. Burwell. The case involves the availability of tax credits in federally-run, as opposed to state-run, health care exchanges under the Affordable Care Act (ACA). If the Court eliminates the credits, premiums will rise and millions of Americans will be left uninsured. One study estimates that each year, 9,800 people will die as a result of being uninsured. This shock to the insurance market could trigger a “death-spiral” of skyrocketing premiums that would mean the complete collapse of the ACA system and leave even more Americans uninsured.
The ACA requires states to establish a health insurance exchange. If they fail to do so, the federal government will establish one on the state’s behalf. Today, a majority of states use a federal exchange. A separate provision of the ACA provides tax credits to anyone who enrolled in a health insurance plan “through an Exchange established by the State” if their income is low enough to qualify for such credits.
Applying this provision, the IRS gives credits to taxpayers in states that have established their own exchanges, and to those in states where the federal government has established an exchange on the state’s behalf.
The plaintiffs in King argue that “established by the State” only includes state-run exchanges, and that the millions of Americans who have purchased insurance through federally-run exchanges are ineligible for the tax credits that make health insurance affordable.
The case is likely to result in a divided opinion. Many court watchers expect Justices Antonin Scalia, Clarence Thomas, and Samuel Alito to side with the challengers, while Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan are expected to vote for the government. That leaves Chief Justice John Roberts and Justice Anthony Kennedy as the swing votes.
One of the highlights of the argument you won’t hear below was Chief Justice Roberts’s near total silence, leaving no indication of which way he will vote. Instead, much of the post-argument discussion focused on Justice Kennedy’s concerns about federalism, which are highlighted below.