Republicans in the House voted on Wednesday to repeal the Affordable Care Act—for the fifty-six time. After four years these show votes have become a tedious joke. But Wednesday’s action had bleaker implications, as it was cast in the shadow of a lawsuit that could undermine the healthcare law in fatal ways.
In a few weeks the Supreme Court will hear oral arguments in King v. Burwell, which contends that the text of the ACA allows the IRS to give subsidies only to people who purchase insurance through exchanges set up by their state, and not to those who rely on the federally run marketplace. If the plaintiffs prevail, some 7 million people in the thirty-four states that have declined to set up their own exchanges would lose the tax credits that subsidize their insurance. Coverage would likely become unaffordable for many of them; without enough people in the marketplace, the law could collapse into a “death spiral.” In human terms, a group of hospitals wrote in a brief supporting the government, a ruling in favor of the plaintiffs “would be a disaster for millions of lower- and middle-income Americans…. The ranks of the uninsured will swell again, with all that portends in the way of untreated illness and overwhelming debt.”
To build their case, the plaintiffs have erected a rickety scaffold of fictional history around a single phrase in the 906-page law. The section of the law in question concerns the calculation of subsidies available to people “enrolled in through an exchange established by the State.” The plaintiffs argue that lacking an explicit reference to subsidies available to people enrolled in the federal exchanges, the text indicates that subsidies are only available in states operating their own. Furthermore, the plaintiffs argue, this was not sloppy writing but instead “reflects a specific choice by Congress” to design the subsidies as a carrot to entice states to establish their exchanges and punish them if they failed to do so.
The lack of structural integrity in the plaintiff’s case has become increasingly obvious in the past week, thanks to a sheaf of briefs filed by filed by states, lawmakers, and the healthcare industry. In sum, there’s about zero evidence for the challengers’ version of history, and what proof they do muster is shoddy. For example, one brief cites former Nebraska Senator Ben Nelson, who played a defining role in designing the exchanges. According to the plaintiffs, Nelson thought it was “insufficient to merely allow states the option to establish Exchanges,” hence the need for a stick. But Nelson himself stated recently that he “always believed that tax credits should be available in all fifty states regardless of who built the exchange, and the final law also reflects that belief as well.”