King v. Burwell: SCOTUS decision could change everything--or nothing

November 11, 2014 | By Gienna Shaw

On Friday, the Supreme Court announced it would hear the case of King v. Burwell, which challenges the legality of federal insurance subsidies. At issue is whether Congress intended to allow subsidies for consumers shopping on the federal health insurance exchange in addition to state-run marketplaces.

Around the Web, reaction to the news was mixed, with arguments ranging from "this could change everything" to "this is not big deal."

On the "change everything" end of the spectrum, many news outlets and pundits are already mourning the loss of healthcare reform. A New Republic headline proclaims: "The Supreme Court is now a death panel."

It cites as an example those who used their new coverage to finance life-saving treatments that would leave them in need of chronic care for the rest of their lives. "Take away the health law, and most of these organ transplant recipients and other patients would have become unable to afford their medications, and some of them would die."

A Los Angeles Times analysis raises concerns that striking down subsidies would widen the gap between health insurance haves and have-nots. "If the Supreme Court rules against federal subsidies in the 36 non-exchange states and those states don't respond, the second class will fall further behind the rest of the country," writes Michael Hiltzik.

Other news outlets attempted to soothe pro-reformers' fears.

Over at Slate, for example, the clever headline "Obamacare is doomed! Everybody panic!" was followed up with the more reassuring subhead: "Not so fast, progressives. It's far from a sure thing that the Supreme Court will destroy the Affordable Care Act." The article argues that if the court strikes down subsidies, it will push more states into the "Obamacare fold."

"There's going to be a lot of pushback to yanking the subsidies out of the hands of the 4.6 million people that are already getting them," the article notes. "There is a difference between denying a benefit you never experienced and taking away a benefit that made your life immeasurably better for a brief period of time. If the court sides with the challengers, it is going to put pressure on the states that opted out of creating an exchange for ideological reasons to do something to ensure that those who can't afford it can get insurance."

Similarly, another New Republic article offers up eight reasons to "stop freaking out about the Supreme Court's next Obamacare case."

Among them: The legal case is "extremely weak;" the Roberts court is "business friendly;" and the ruling would be "embarrassingly hypocritical."

"The four other conservatives on the Court have already acknowledged that the ACA scheme requires subsidies to flow everywhere," the article notes. "If justices Alito, Scalia, Thomas and Kennedy want to nix the subsidies, they'll be tacitly admitting that they read the statute incorrectly. But if the statute is so easy to misconstrue, then it's probably ambiguous. And if that's the case, the federal government should win."

Meanwhile, there's a healthy--and lengthening--debate underway at the Supreme Court-focused SCOTUS blog, which has a "symposium" section devoted to multiple points of view on and analysis of the case, including an article that lists 7 myths about King v. Burwell. Among them, the author argues, is the idea that King would cause massive disruption.

These cases "seek to end the political and economic disruption caused by the Internal Revnue Service's decision to expand the ACA's major taxing and spending provisions outside the legislative process, writes Michael F. Cannon, director of health policy studies at the libertarian Cato Institute.

"How much disruption the IRS rule ultimately causes depends on how Congress responds to its being struck down. Congress could simply ratify the IRS's revision of the statute by authorizing subsidies in federal exchanges. Or it could move in the opposite direction, and make private insurance more affordable for millions, particularly low-income Americans, by actually reducing its cost."

But Nicholas Bagley, an Assistant Professor at Michigan Law, argues that the fact the Supreme Court agreed to hear King is bad news for the ACA.

"The government had asked the Court to take a pass [on King] because there's no split in the circuit courts over whether the IRS rule is valid," he writes.

"What's troubling is that four justices apparently think--or at least are inclined to think--that King was wrongly decided. As I've said before, there's no other reason to take King. The challengers urged the Court to intervene now in order to resolve 'uncertainty' aboutt the availability of federal tax credits."

To learn more:
- here's the New Republic "death panel" article
- read the LA Times piece
- check out Slate's take
- here's the second New Republic article
- view all of the SCOTUS blog symposium articles