Liberals Lose Their Cool in the Supreme Court Fight Over Obamacare

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by Paul M. Barrett,

from Bloomberg Businessweek,

On Nov. 7, the Supreme Court said it would entertain the latest legal assault on President Obama’s health-reform program. Leading liberal analysts worry—reasonably—that the justices will cripple Obamacare. Unfortunately, these defenders of the program are making their case by preemptively accusing right-leaning members of the high court of bad faith and rank partisanship.

Paul Krugman of Princeton and the New York Times has has called the argument that a syntactical glitch ought to doom the premium-subsidy provision of the 2010 Affordable Care Act a “cruel absurdity.” Any justice adopting this argument won’t merely be wrong, Krugman continued, he will be “corrupt”—“willing to pervert the law to serve political masters.”

Linda Greenhouse of Yale Law School and the Times branded the high court’s agreement to hear the Obamacare challenge “a naked power grab by conservative justices who two years ago just missed killing [PDF] the Affordable Care Act in its cradle.” Greenhouse (disclosure: She’s an old friend) finds the arrival of the new case on the court’s docket “profoundly depressing” because it confirms that the justices are “just a collection of politicians in robes.”

In fact, the fight over Obamacare involves a real—if highly technical—flaw in the underlying 2010 law. Given our polarized, litigation-happy culture, it seems unsurprising, to say the least, that conservative activists would exploit every statutory weakness to seek to reverse the president’s signal legislative achievement. Rather than hysteria or depression, the better response is calm refutation.

The fight concerns the meaning of five words: “exchange established by the state.” To understand why that phrase is so important, let’s digress for a quick refresher on the Affordable Care Act. The law has three pillars: It bans insurers from denying coverage based on preexisting conditions.; it mandates that everyone buy insurance to assure that healthy people participate; and to make the mandate workable, it subsidizes less-well-off consumers.

Despite conservative warnings of incipient socialist dictatorship, among other dire side effects, the program seems successful. Millions of previously uninsured people now have coverage. Carriers are offering affordable premiums. Following initial software snafus, Americans are enrolling via state- and federal-sponsored exchanges at higher-than-expected levels.

The Supreme Court challenge, however, isn’t about whether Obamacare works. The case addresses who can get those critical tax subsidies, without which the mandate would collapse, probably causing the program to unravel.

Read literally, the law provides subsidies for policies purchased on state-run insurance exchanges, not those run from Washington. The problem with that language is that only 14 states have set up their own exchanges.

Charged with interpreting Obamacare, the Internal Revenue Service concluded that Congress couldn’t have intended to gum up the statutory machinery with this state-versus-federal distinction. In the normal course of judicial business, courts defer to agency readings of ambiguous statutory verbiage. If I were justice-for-a-day, I’d uphold health reform on this basis: It’s pretty clear what Congress was trying to do, and the experts at the IRS deserve deference. Next case!

The Obamacare challengers disagree. They contend that the state-exchange language isn’t ambiguous. The justices, they argue, lack authority to rewrite an important piece of legislation. If sloppy lawmakers wish to see their handiwork repaired, according to this view, they have to do it themselves. (With Republicans now in control of both chambers of Congress, of course, the notion that a revised version of Obamacare would find its way back to the president’s desk seems facetious.)

Contrary to Krugman’s slashing analysis, it’s not “corrupt” to read a clunky statutory provision according to its literal meaning, as opposed to inferring a more logical intention on the drafters’ part. It might be wrongheaded and mechanistic, but it doesn’t seem deceitful to oblige Congress to speak clearly when it is establishing a far-reaching economic and social policy.

To sum up: Obamacare could be in trouble at the high court. The justices upheld the individual mandate by a razor-thin 5-4 vote. Conservative justices appointed by Republicans are less likely to be sympathetic to Obama’s agenda than are liberal justices appointed by Obama or other Democrats. Still, arguments on the merits are more likely than ad hominem invective to affect the outcome.

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