Supreme Court on Obamacare: A political vise grip

Now that midterm congressional elections are behind us, the major politics are starting.

I'm not talking about the 2016 presidential race. I'm talking about the 2015 Supreme Court. By accepting a legal challenge based on a poorly drafted passage of the Obamacare statute, the justices have placed themselves in a political vise grip.

Conservatives, who just won big in House and Senate elections, seek one last shot at derailing the law that the court permitted to stand two years ago. With a majority of Republican appointees on the court, conservatives have reason to hope.

People wait to enter the U.S. Supreme Court, Nov. 10, 2014.
Larry Downing | Reuters
People wait to enter the U.S. Supreme Court, Nov. 10, 2014.

But a decision vindicating Obamacare opponents would also unleash a volatile reaction: From an insurance industry facing massive disruption in the new health-care marketplace they're growing accustomed to, and from millions of Americans who would lose the taxpayer subsidies that make it possible for them to afford comprehensive coverage. Whatever party's president appointed them, justices pay attention to real-world consequences.

The underlying legal claim in King v. Burwell is at once simple and shaky. At its heart is a sentence in the law permitting taxpayer subsidies for customers buying policies from health-care exchanges "established by the state."

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Plaintiffs claim that means the law bars subsidies for customers in the 36 states that declined to establish their own exchanges and instead relied on a provision of the law allowing the federal government to set up the exchange for their residents. The Obama administration argues that "established by the state" is a legal boilerplate that encompasses federally operated exchanges as well.

The disagreement has nothing to do with what congressional sponsors of the law intended. It is clear they intended that customers in either type of exchange would receive subsidies, since subsidies are indispensable to making the entire system work. As a result, all Congressional Budget Office analyses of the law's cost and impact assumed that they would.

The question is whether the justices, as they did in the controversial Bush v. Gore case that settled the 2000 presidential election, reach the result corresponding to their political origins.

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It's unclear precisely what will happen if they do. Individual states that have so far declined to set up their own health-care marketplaces might do so, though some deep-red states could resist. Or Congress could take up legislation clarifying the ability of federally run exchanges to offer subsidies. To do so, Republican majorities in the House and Senate would insist on changes to the law that the White House wouldn't like.

There's also the chance that states and Washington couldn't act, while health-care customers with modest incomes simply lose coverage. And that would leave the Supreme Court with the biggest political mess of all.