Two questions will dictate not only the future of healthcare, but also the balance of power between Washington, D.C., and the states, and the separation of powers between the federal branches. One concerns state sovereignty, the other the heckler’s veto.
When justices heard arguments regarding the Affordable Care Act (ACA, or Obamacare) in King v. Burwell on March 4, Justice Anthony Kennedy and Chief Justice John Roberts suggested ways they might vote to uphold an Internal Revenue Service rule granting taxpayer subsidies to Obamacare exchange policies in states that refused to join that part of the ACA.
The ACA’s Section 1401 provides that subsidies are granted for insurance policies purchased on exchanges “established by the State under [Section] 1311.” By contrast, the federal exchange is created by Section 1321. Challengers argue this was deliberate, pressuring states to create exchanges and join Obamacare, like the provision threatening states with canceling all Medicaid funds if they did not join the ACA’s expanded Medicaid. (The Court struck down that part of the ACA in 2012 for coercing the states, violating the Tenth Amendment.) The now-infamous videos of Dr. Jonathan Gruber corroborate this theory.
Justice Kennedy asked if the challengers’ interpretation of the ACA would likewise coerce the states, putting them in a politically painful situation of denying tax subsidies to voters. Plaintiffs’ lawyer Michael Carvin cited the brief filed by the State of Indiana arguing that the Hoosier State deliberately chose to reject the exchanges because receiving subsidies is the ACA’s sole trigger for imposing employer-mandate penalties on the states and their political subdivisions.