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Health care subsidy challengers see dire problems soon

The problem of fixing the federal health care program will only grow worse if the Supreme Court does not promptly resolve the legality of subsidies to help lower-income individuals pay for insurance, the challengers to the subsidy scheme told the Justices on Tuesday.  This was the formal reply to the Obama administration’s argument early this month that the Court should wait to see how a federal appeals court deals with the subsidies’ legality.

Trying to head off a denial of review by the Justices of their challenge this Term, their new filing argued that postponing the dispute “would be the worst possible course,” because millions of individuals who have come to rely on the subsidy payments face the prospect of losing them as the dispute lingered in the courts, and employers, insurers and states have also relied on the system as the government now operates it.

The brief contended that there is no guarantee that, as other lower courts examine the legality of the subsidies under the Affordable Care Act, there will not be a split that will require the Justices to step in at some point.  Already, the filing noted, a federal judge in Oklahoma has nullified the subsidies as they apply to consumers getting health insurance on marketplaces (“exchanges”) run by the federal government in thirty-four states.

“The dispute will persist, lower courts will continue to disagree, and confusion will reign, until a definitive resolution,” the document argued.

The case now awaiting the Court’s attention, and likely to be considered by the Justices as soon as their private Conference on October 31, is King v. Burwell.  It seeks review of a decision by the U.S. Court of Appeals for the Fourth Circuit upholding the award of subsidies to consumers who obtained insurance through a federally run exchange.   That ruling conflicted directly with one by the U.S. Court of Appeals for the District of Columbia Circuit, allowing the subsidies only in the sixteen states where insurance exchanges are operated by the states themselves.

The D.C. Circuit ruling has now been set aside, as the en banc D.C. Circuit reviews the issue — a process that is likely to continue for several months.  The hearing on that case is not even scheduled to take place until mid-December, and the likelihood that the ultimate decision will split the judges (the panel was divided two to one) almost certainly would mean that no decision would emerge until too late for the case to go to the Supreme Court for action this Term.

The new health care law, in which the subsidy program is a central part, is “the most significant social legislation in a generation, inducing pervasive reliance by not only nearly every American citizen and business, but also by all the states,” the challengers’ brief said, adding that “tens of billions of dollars will be spent annually” under the program as it now operates, in all fifty states.

The brief summed up: “In short, the Court may either resolve this issue before tens of billions of dollars are lost, before employers restructure their workforces to avoid the employer mandate, before individuals rely on subsidies in making health-care decisions, before insurers revamp their offerings to account for new risk pools, and before more states default to the [federal] exchange assuming no consequences follow — or delay until after that reliance, on the government’s baseless assertion that this matter of extraordinary national importance and heated jurisprudential debate will go away on its own.  The government’s position is irresponsible and should be rejected.”

The brief, however, argued in a footnote that, if the Court does opt to wait for the D.C. Circuit’s en banc review, it should at least keep the challengers’ case intact on the Court’s docket and not deny review, so as to allow “more expedited review” once that lower court decision has emerged.

The filing of this brief completes the written preparation of the case for the Justices, so it can soon be sent to the Justices to set up a vote on whether to grant or deny review, or to hold the case.



Recommended Citation: Lyle Denniston, Health care subsidy challengers see dire problems soon, SCOTUSblog (Oct. 14, 2014, 4:50 PM),