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Court Upholds Obamacare

Analysis: Supreme Court decision strengthens Obamacare, undermines rule of law

Members of the news media, including interns for network television stations, run with decisions in hand on the opinion for health care outside of the Supreme Court in Washington
Members of the news media, including interns for network television stations, run with decisions in hand on the opinion for health care outside of the Supreme Court in Washington / AP
June 26, 2015

The Supreme Court ruled 6 to 3 on Thursday that the Affordable Care Act allows the federal government to subsidize health insurance on federally created exchanges, a decision met with joy and relief by liberals and disappointment mixed with outrage by conservatives.

There are three levels on which to understand this decision in King v. Burwell: the practical, the political, and the constitutional. The three are distinct but related, together showing how harmful this decision is to any effort to replace Obamacare and maintain our constitutional order.

Practically speaking, the decision means that individuals in the 34 states that did not create their own exchanges who bought insurance on the federal exchange with the help of a subsidy will get to keep that subsidy—and, because of that, will keep their insurance. One estimate put the number of people who will keep their insurance at 6.4 million.

The decision also means that the insurance markets in states that refused to set up their own exchanges will remain functional. Had the Court ruled the other way, the insurance markets could have suffered a so-called "death spiral," where prices rise drastically, causing people to forgo buying insurance and making the entire business model of health insurance unsustainable. The entire health insurance market could have collapsed in those states.

This practical effect of the decision directly impacts the political. Had the decision gone the other way, health care would have immediately become one of the largest issues in the 2016 election.

Congress would have almost certainly passed some sort of temporary fix, preventing chaos as millions of people drop their newly bought insurance, but it is hard to imagine that this Congress would completely save the law. That would leave it up to each party’s standard-bearer in 2016 to campaign on his or her plan for health-care in America.

Obamacare has many flaws: It prescribes what insurance must look like and then mandates that everybody have it, driving up costs for many people and infringing on everyone’s freedom. It does little to affect Medicare, which is one of the largest drivers of health-care cost growth in the country. It expands a deeply flawed health-care program for the poor, Medicaid. And it fails to account for other potential ways of controlling costs and improving care while ossifying in law a particular approach to health care in America.

The 2016 election would have been about Obamacare and its problems had the subsidies been struck down. Instead, this decision does much to cement the law into place—a reality that President Obama was fully aware of during his triumphant remarks after the decision came down. Comparing Obamacare to Social Security and Medicare—two very popular programs—Obama said, "What we’re not going to do is unravel what has now been woven into the fabric of America."

While Obamacare may still be an issue politically, it will be much easier for politicians of both parties to ignore it. The odds that it will be repealed and replaced just went down significantly.

Third, this decision implicates the constitutional order of our country. This decision did not touch on any particular phrase of the Constitution itself, unlike the previous decision, National Federation of Independent Businesses v. Sebelius. It focused solely on a phrase in the law. But the decision hits at an even deeper principle of our political order.

A fundamental principle of American democracy, and liberal democracy everywhere, is the rule of law. This principle means that the government can only exercise its power according to the explicit provisions of a written law, and it can do no more. If it does more, it is acting according to the will of individuals, not the provision of the law.

This decision is an example of rule by the will of six individuals instead of the rule of written law.

The Court’s decision, written by Chief Justice John Roberts, begins with the conclusion: The law must be saved. It then effectively contorts the law’s text to fit with that conclusion.

Roberts argues that Obamacare fits into that lineage of attempts at health care reform by adopting three particular policy mechanisms: guaranteed issue of insurance to all individuals; the mandate that individuals must buy that insurance; and subsidies to help them buy that insurance. It is in the context of this history that the Court comes to the conclusion that the subsidies must be available everywhere, because if they were not, then the whole scheme would fall apart.

"The tax credits are among the Act’s key reforms," the Court writes, proceeding to interpret the law’s text in light of this "key" reform. But it is not the Court’s responsibility to determine what the Act’s "key reforms" are. To do so demonstrates not impartial judgment on the merits of a law but instead implies a list of policy priorities—and if that is not a political judgment, nothing is.

The Court is likely not wrong about the intention of the law. It is hard to imagine that Democratic staffers did not intend for the federal government to completely take over for recalcitrant states and help individuals in those states by providing subsidies. The Court’s reasoning about the law’s history is likely right, too. Ultimately, this probably was a drafting error of a kind, and the law’s writers probably did intend for the subsidies to be available everywhere.

But the Supreme Court is not supposed to rule on intentions. Its job is to rule on the law. The "Court forgets," Scalia wrote in his passionate dissent, "that ours is a government of laws and not of men. That means we are governed by the terms of our laws, not by the unenacted will of our lawmakers."

Published under: Obamacare