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Supreme Court hears King v. Burwell arguments

Could four words derail the Affordable Care Act?

The Supreme Court of the United States heard oral arguments today in the King v. Burwell case, which questions the legality of tax subsidies for health insurance purchased on Healthcare.gov. FierceHealthPayer attended the proceedings.

[Related special report: King v. Burwell Supreme Court ruling: What you need to know.]

Michael Carvin, arguing on behalf of the plaintiffs, targeted the ambiguity of provision 1311 of the Affordable Care Act, which reads "through an exchange established by the State." Carvin implied this language, as put forth by Congress, was plain sense and should be read in those terms. If a state established and set up its own insurance exchange, then residents in that state would be eligible for federal subsidies. If not, then residents of that state are not eligible for subsidies.

Following Carvin's opening remarks, Justice Elena Kagan raised the issue of looking at the statute in its entirety and not focusing on a few sentences.

Justice Anthony Kennedy then said: "If we read the provision--and the statute as a whole--the way you are reading it, then we will need to focus more on the federalism implications." Congress did not write the health reform law with the intention to coerce states. Doing so, Kennedy said, would create a death spiral: Insurers would have to raise premiums, while many individuals would drop out of the insurance market. Kennedy added that accepting Carvin's argument would raise a serious constitutional argument regarding how statutes are read.

Carvin, whose argument relied heavily on the constitutionality of Medicaid, mentioned that, if the Supreme Court does rule subsidies illegal, Medicaid in turn would be illegal.

After a vivacious back-and-forth, Justice Ruth Bader Ginsburg said to Carvin, "I have never seen anything like this argument before. If your argument stands, what will insurers sell on? How can exchanges exist without subsidies?"

Kagan later stated that, should subsidies disappear, no one will visit the insurance exchanges. Congress did not craft the ACA in a way to place the burden on the states, noted Kagan. The phrase at question was put in an obvious place within the statute. Everything was devised with a technical formula in mind, she said.

Carvin also told the justices that the ACA was created to be implemented in a harmonious way. Due to the phrase in question--"established by the State"--he said this clearly is not happening. 

A Supreme Court decision on King v. Burwell is expected in June.

Related Articles:
King v. Burwell: What you need to know
How King v. Burwell could impact insurers' rate filings
Burwell: There's no backup plan in subsidies case
Governors weigh options ahead of King v. Burwell
Panel: ACA will not disappear should Supreme Court side with King v. Burwell plaintiffs
Briefs: King v. Burwell ruling against subsidies would be 'devastating'
States, not Congress, will likely pick up slack after King v. Burwell