The Supreme Court is set to begin hearing arguments on Wednesday in the challenge to Obamacare that could result in millions of Americans losing their healthcare subsidies, setting off a possible death spiral for President Barack Obama’s signature domestic policy.
With the nation’s top court increasingly voting along political lines in the past decades, the King v. Burwell case has the potential to come down to the partisan split between jurists on the bench, The New York Times reported.
There are currently five Republican-appointed justices sitting on the Supreme Court and four Democratic-appointed justices, according to the newspaper.
And if they vote the way they are expected to, 5 million people out of the 10 million who have signed up with Obamacare could lose their subsidies and then may not be able to afford insurance.
The Times, in fact, says that by next year, if the government loses the case, the number of Americans with health insurance could be reduced by 8 million people.
But the paper noted that sometimes justices will not vote along party lines, as was the case in 2012 when two Democratic appointees joined with conservative jurists to hold up a major part of the law’s Medicaid expansion, while a GOP appointee sided with liberal justices in approving the rest of the law.
"But such cross-party rulings, once the norm in major cases, no longer are," writes the Times' David Leonhardt. "Instead, the justices often vote much the way the presidents who appointed them and senators who supported them would hope. Presidents now choose justices with greater focus on their ideology."
Without subsidies, the young and healthy may opt out of insurance and risk tax penalties instead, while the elderly and more infirm are likely to continue paying for insurance. But the law needs the younger customers to counter-balance the costs of the older enrollees.
The loss of millions of healthy enrollees would also likely drive up the cost for some people even without subsidies, making their coverage unaffordable as well, which overall could result in the ultimate demise of a vital section of the Affordable Care Act.
The legal battle, which will be decided with a Supreme Court ruling in June, centers on the actual language of the law — a four-word phrase to be exact.
The law says that subsidies should only go to people who buy insurance on marketplaces "established by the state." But only 13 states have established such exchanges, while 34 states, mostly Republican-controlled, have not. Residents of those states get insurance through a federal marketplace.
In other words, by the letter of the law, in order to receive subsidies, customers need to buy insurance on a state-established exchange.
But Obamacare supporters says the intention of the law was clear, and that every person was entitled to subsidies whether they enrolled with the federal exchange HealthCare.Gov or the state-run exchanges.
"The four-word phrase appears to have been an unintentional bit of murkiness, if not an outright mistake," writes Leonhardt in the Times' The Upshot blog. "Not until the plaintiffs came up with their novel legal argument did its alternative possible meaning receive serious attention.
"The strongest part of the plaintiffs' argument is that four-word phrase. The rest of the law tends to distinguish carefully between the federal government and the states.
"The weakest part of the plaintiffs' argument is everything else about the law. In drafting it, Congress members and Obama administration officials never suggested that subsidies should apply only to state exchanges."
In an interview with Reuters on Monday, Obama said
that King v. Burwell is "a pretty straightforward case of statutory interpretation."
He said, "If you look at the law, if you look at the testimony of those who are involved in the law, including some of the opponents of the law, the understanding was that people who joined a federal exchange were going to be able to access tax credits just like if they went through a state exchange."
He added, "There is, in our view, not a plausible legal basis for striking it down."
But with five GOP appointees on the bench and four Democratic appointees, the fate of Obamacare may all come down to politics, says the Times.
And if the government loses the case, the healthcare law’s death spiral may be triggered because Health and Human Services Secretary Sylvia Burwell has admitted that there are no contingency plans to deal with the loss of subsidies.
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