King vs. Burwell: Does PPACA bully the states?

A U.S. Supreme Court justice generally viewed as liberal today came out against the idea of Congress sneaking a provision requiring states to set up health insurance exchanges into a statute.

If Congress wants to try to coerce states into setting up health insurance exchanges, it should say so openly, and not do so in an indirect fashion, according to Justice Sonia Sotomayor.

Sotomayor and a colleague viewed as a potential swing voter, Justice Anthony Kennedy, talked about the coercion issue today during oral arguments at the court on King vs. Burwell (Case Number 14-114).

The PPACA opponents who brought the case say the plain language of the Patient Protection and Affordable Care Act (PPACA) gives only PPACA health insurance exchanges established by states the ability to offer the PPACA premium tax credit. Exchanges established by the U.S. Department of Health and Human Services (HHS) have no ability to offer the tax credit, the petitioners say.

HHS Secretary Sylvia Burwell and other Obama administration respondents say the HHS exchanges can offer the tax credits.

If a state that refuses to set up its own exchange loses any ability for its residents to get PPACA premium tax credits, and, at the same time, will come under the PPACA commercial health insurance provisions, such as the provisions requiring individual health insurers to sell coverage without using consumers' personal health information, or using information other than age and tobacco use in pricing, then PPACA will likely lead to a "death spiral," or an ever-escalating cycle of market shrinkage and rate increases, Sotomayor said, according to the court's oral arguments transcript.

"Tell me how that is not coercive in an unconstitutional way?" Sotomayor asked.

In a recent case, the court ruled that the Supreme Court tries to read a statute "in a way where we don't impinge on the basic federal-state relationship," Sotomayor said.

Kennedy later echoed Sotomayor's argument. If the petitioners' argument is correct, for a state to choose not to set up a PPACA exchange "is just not a rational choice," he said. "They're being coerced."

Another justice, Elena Kagan, asked why Congress would coerce states by wording its description of the authority of an HHS exchange slightly differently than the wording it used to describe the authority of a state-based exchange.

"There's at least a presumption, as we interpret statutes, that Congress does not mean to impose heavy burdens and Draconian choices on states unless it says so awfully clearly… There's nothing clear about this. I mean, it took a year and a half for anybody to even notice this language."

Justice Antonin Scalia suggested that the Obama administration and his colleagues have been twisting the language of PPACA to try to get the language to say something other than what it actually says.

The argument seems to be "every statute must make sense, and, we will twist the words as necessary to make it make [sense]," Scalia said. "That can't be the rule."

Even if the only reasonable interpretation of a particular provision in a statute produces disastrous consequences in the rest of the statute, it still means what it says, Scalia said.

Late in the hearing, Justice Samuel Alito talked about the possibility that the court might be open to adjusting a ruling against the Obama administration to try to limit the effects.

The court has stayed the effect of other rulings until the end of the tax year, to avoid "very disruptive consequences," and it could do that in this case, Alito said.

The justices who generally back the Obama administration also asked many questions about whether the plaintiffs in the case have standing to bring the case, suggesting that the court could still look for a way to avoid ruling on the merits of the case by using procedural issues to knock it out.

King vs. Burwell: Does PPACA bully the states?

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King vs. Burwell: Does PPACA bully the states?

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