Predictions of health-care law's possible demise ignore this contingency plan
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Some have said the Affordable Care Act will enter a death spiral if the U.S. Supreme Court rules against the Obama administration on the reach of tax credits for lower-income individuals.
But the ACA could survive if the Obama administration considers a contingency plan that may, at first glance, appear radical, according to University of Chicago law professor William Baude.
President Obama could announce he is complying with an adverse ruling, but only with respect to the four plaintiffs who sued, Baude writes in a column for the New York Times.
The government, of course, almost always applies Supreme Court decisions to all similarly situated people, Baude says. Not doing so would spur suit after suit by those who seek application of the decision to their situation.
But the Supreme Court case of King v. Burwell is different, he says, because most people who receive tax credits are happy to get them. Most of those who benefit will never sue.
At issue in King v. Burwell is the meaning of a provision in the health law providing tax subsidies for lower-income individuals participating in insurance exchanges “established by the state.” Challengers claim the subsidies aren’t available in states using federal, rather than their own, insurance exchanges. At least 34 states rely on the federal exchanges, and some have predicted the law will enter a death spiral if tax credits are limited.
Baude acknowledges “legal wrinkles” if Obama were to limit application of an adverse decision to the plaintiffs. “Lower courts have sometimes claimed legal authority to invalidate a regulation (which is at issue in this case) even for parties who aren’t before the court,” Baude says. “And some employers might be able to bring lawsuits that would call their employees’ subsidies into question. But the administration has already raised legal defenses to those potential problems in other lawsuits and could press those defenses here, too.”
Obama could take political heat for complying with respect to just the four plaintiffs. Baude suggests the option is nonetheless worth consideration. The administration should “decide whether it is willing to put its constitutional powers behind its words. If not, then it will deserve a share of its own blame,” Baude says.
