ST. LOUIS – One hundred eighty-three dollars and eighty-five cents: That’s how much LaDonna and Tom Appelbaum pay a month thanks to subsidies under the Affordable Care Act.
$15,803: That’s how much they saved in medical bills in the month of May alone. Months after they bought health insurance on the federal marketplace for the first time since 2010, Tom, 49, needed hand surgery. LaDonna, 48, was diagnosed with breast cancer.
$616: That’s how much their monthly premium could go up if the Supreme Court rules as conservative activists hope in the pending case King v. Burwell. The plaintiffs in the case argue that the wording of the Affordable Care Act means only plans purchased on state exchanges are eligible for subsidies. Missouri, where the Appelbaums live, is one of 34 states that refused to set up a state exchange.
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In total, 6.4 million people are in the same boat, facing skyrocketing premiums if the Supreme Court says four words in the text of the law make their financial aid illegal. A decision is expected any day now.
The case was born at a conference hosted by the conservative American Enterprise Institute in 2010. The leading lights of the right gathered to figure out how to undermine the recently passed Affordable Care Act. "The bastard has to be killed as a matter of political hygiene," said Michael Greve of the American Enterprise Institute at the event. "I do not care how this is done, whether it's dismembered, whether we drive a stake through its heart, whether we tar and feather it and drive it out of town, or if we strangle it. I don't care who does it, whether it's some court someplace or the United States Congress, any which way, any dollar spent on that goal is worth spending."
In 2012, five justices of the Supreme Court agreed that the core of the Affordable Care Act was constitutional, thwarting opponents on that front. But eventually, libertarian and conservative activists found another angle: What if the Obama administration had misread its own law? One crucial part of the law is the tax credits offered to middle-income Americans who buy plans on the individual markets by shopping on websites known as “exchanges.” The crafters of King v. Burwell seized on one part of the law that says that tax credits to help people afford health insurance would be available through an exchange “established by the state.” Although there is no evidence that Congress discussed it at the time, the plaintiffs now argue that only residents of states that set up their own exchanges, rather than rely on “federally-facilitated” marketplaces on healthcare.gov, are eligible for the subsidies.
The Obama administration says that it makes no sense to read the law out of context as the plaintiffs have, and that even if it’s ambiguous, the court’s precedent is to defer to a federal agency on what a law means. The 4th Circuit Court of Appeals found that the wording of the law was “ambiguous and subject to multiple interpretations” but said that the administration had the authority to interpret the law as it did.
There are many extraordinary qualities to this lawsuit. At least four justices of the Supreme Court opted to hear the case despite the lack of a split in the federal appeals court, usual grounds for taking a case. And as Justice Ruth Bader Ginsburg pointed out in oral argument, the standing of some of the plaintiffs to even sue is in question.
The conservative and libertarian lawyers and policy wonks recruited four Virginia residents to be plaintiffs in the case. They argue that because the subsidies make them ineligible for a hardship exemption, they are forced to spend money to buy health insurance or pay a fine. But Mother Jones and the Wall Street Journal reported that at least three of the plaintiffs may not even be eligible under the terms of the case, because they qualify for veterans’ healthcare, may not make enough money to be required to buy health insurance, or may not even actually live in Virginia. (Mother Jones also reported that one of the plaintiffs, Rose Luck, has called Obama the "anti-Christ," who "he got his Muslim people to vote for him," and another recently told The New York Times, “I listen to everybody bitch and moan and cry about Obamacare. We did something about it.”)
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At oral argument in March, the four Democratic-appointed justices were plainly skeptical. Justice Sonia Sotomayor said that interpreting the law as the plaintiffs wanted would mean “we're going to have the death spiral that this system was created to avoid.” She added, “Do you really believe that States fully understood … that their citizens were not going to get subsidies if they let the federal government [set up their exchanges]? What senator said that during the hearings?” Justice Elena Kagan said, “I think what we're suggesting is that, if you look at the entire text, it's pretty clear that you oughtn't to treat those five words in the way you are.”
As usual, all eyes were on Justice Anthony Kennedy, who seemed troubled by the plaintiffs’ case. “It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there's a serious constitutional problem if we adopt your argument,” Kennedy told Michael Carvin, arguing for the plaintiffs. The court’s usual practice is to avoid deciding constitutional questions if a more ready interpretation is available to them.
“Everyone says, ‘You look great, you’re getting through this, I can’t believe you’ve had surgery, you’re getting chemotherapy.' I believe that’s because I was able to focus on my health, and not our wealth.”'
If the plaintiffs win and subsidies are only available on state exchanges, a Congressional stalemate is likely, since Republicans are hostile to the entire Affordable Care Act and are disinclined to fix it. Even states that have governments inclined to set up exchanges may not be able to set them up in time. In Missouri, there is an extra hurdle. In 2012, voters passed a referendum that says that any state exchange has to be created through the legislature’s assent, or through another referendum, rather than a governor’s executive order. The current governor is a Democrat; Republicans have a supermajority in the legislature.
In the meantime, the Appelbaums, who are Democrats who supported the Affordable Care Act, wait to see if they can keep affording their insurance. “Everyone says, ‘You look great, you’re getting through this, I can’t believe you’ve had surgery, you’re getting chemotherapy,’” says LaDonna, who helps out at her husband’s law practice between chemotherapy and radiation sessions. “I believe that’s because I was able to focus on my health, and not our wealth.”