Corporate Accountability

Two sides enter the ring for another Supreme Court battle over health care

By Robert Barnes


Washington lawyer Michael A. Carvin will be back at the Supreme Court on Wednesday for the second great battle over the Affordable Care Act, once again facing off against a familiar adversary in Solicitor General Donald B. Verrilli Jr.


With hardly a trace of deadpan, Carvin said it would be wrong to characterize the case as a rare second chance to bring down President Obama’s health-care law.


“Me, personally?” he said. “I’m a libertarian. I’d get rid of three-quarters of the U.S. Code if I could.” But he added, “The ACA is the law of the land. We want it to be implemented the way Congress intended for it to be.”


Which, in Carvin’s view, would eliminate federal subsidies that an estimated 7.5 million Americans use to pay for health insurance in 34 states.


The two armies have reassembled. In truth, they never dispersed. They have been marshaling their forces and their arguments ever since the Supreme Court ruled 5 to 4 in 2012 to uphold the constitutionality of the measure, devastating those who wanted the justices to strike down the nearly 1,000-page law in its entirety.


Conservative and libertarian groups such as the Competitive Enterprise Institute and the Cato Institute were planning their next court challenge even before the last one was completed. Liberal groups such as the Center for American Progress and the Constitutional Accountability Center reinforced their defenses, this time armed with emotional stories of those who have been helped by the law and now face the loss of insurance.


In 2012, Carvin teamed up with George W. Bush administration solicitor general Paul D. Clement to make the case for the challengers. But Clement has no role in the current case.


This time, it will be only the brash Carvin squaring off against the laid-back Verrilli.


Verrilli’s performance three years ago was panned by courtroom critics. But the understated corporate lawyer was vindicated when Chief Justice John G. Roberts Jr. used one of Verrilli’s alternative constitutional theories to fashion the opinion that saved the act. When Obama got that news, Verrilli was the first person he called.


With his legacy again on the line, the president addressed the latest case when he was asked about it Monday in an interview with Reuters. “The thing’s working. And there’s in our view not a plausible legal basis for striking it down,” he said. “But, you know, we’ll have to wait and see what the Supreme Court decides.”


The challengers say the law is clear that tax subsidies intended to make health insurance affordable for low- and middle-income people are available only where the marketplace — an exchange — is “established by the State.”


But three-quarters of the states opted not to establish an exchange or to rely on the federal government to provide one, as the law prescribes. The Internal Revenue Service passed a rule in 2012 saying that the subsidies were available to all, regardless of whether the marketplaces were set up by the state or the federal government, because that is the best reading of what Congress intended.


Simplified, the case, King v. Burwell, comes down to those four words in the text — “established by the State” — and whether justices must place those words in the context of the entire bill.


“I think Congress says what it intends and intends what it says,” Carvin said. To rule for the government, he said, the court would have to find that Congress “intended the opposite of what it said.”


In the interview, Obama provided the defense. “If you look at the law, if you look at the testimony of those who were involved in the law, including some of the opponents of the law, the understanding was that people who joined the federal exchange were going to be able to access tax credits,” he said, “just like if they went to a state exchange.”


Elizabeth B. Wydra, chief counsel at the Constitutional Accountability Center, said it was clear that the 2012 fight over the constitutionality of the ACA was only the opening round. 


“I do find it interesting that there’s been this conservative-led effort to kill this bill through the courts,” she said. The groups seem to be operating under the theory that “the courts are sort of an untapped resource for pursing the conservative agenda.”


She pointed to widely quoted remarks from Michael S. Greve, former chairman of the Competitive Enterprise Institute, who said shortly after the law passed that it “has to be killed as a matter of political hygiene. I do not care how this is done, whether it’s dismembered, whether we drive a stake through its heart, whether we tar and feather it and drive it out of town, whether we strangle it.”


On the other side, the locker-room quotes are provided by Jonathan Gruber, an MIT professor and health-care adviser to the Obama administration. A video of him saying at a 2012 event that “if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits” went viral on conservative Web sites.


Ilya Shapiro of the Cato Institute said it should not be surprising that the ACA faces many legal challenges. It is a “sloppily written law that is unpopular with the American people,” he said.


Shapiro was at the heart of the last challenge. But he said the different nature of the current lawsuit has given way to other players. The “constitutional law professoriate” active in the last case has been replaced by health-care analysts and statutory interpretation experts.


Michael F. Cannon, Cato’s director of health policy, and Jonathan Adler, a law professor at Case Western Reserve University, have been called the architects of the current suit. They opposed the IRS-proposed rules in an influential column in the Wall Street Journal and have done the most to promote the legal theory behind the fight.


Cannon traveled the country urging resistent states not to establish exchanges. Adler has been a popular apostle. Along with many appearances in Washington, Adler has debated the topic at more than half a dozen colleges and in at least eight other cities.


“The way the law was enacted, the way that it is rightly or wrongly seen as this partisan thing, gives it a huge ideological component,” Adler said. “And then it’s health care, not the Clean Air Act or something else. This statute touches people and energizes people in a way that a lot of other issues don’t.”


But if the last challenge to the health-care law was about stopping a program that polls showed most Americans did not want, this one will be about taking away a benefit that millions already have.


That has changed the dynamics. Big business was active in opposing the law in the last fight. This time, the health-care and insurance industries are vocal on the side of the administration, saying the subsidies are vital to making the system work.


More than 20 states and the District of Columbia — even states that have not set up exchanges — support the administration. They say it was never clear in the law that their citizens would not receive subsidies if they relied on the federal exchanges.


Only a handful of states are on the other side.

More from Corporate Accountability

Corporate Accountability

Intuit, Inc. v. Federal Trade Commission

In Intuit Inc v. Federal Trade Commission, the United States Court of Appeals for the Fifth Circuit is considering whether the FTC’s authority to issue cease-and-desist orders against false and misleading advertising is constitutional.
Corporate Accountability
June 20, 2024

RELEASE: In narrow ruling, Supreme Court rejects baseless effort to shield corporate-derived income from taxation

WASHINGTON, DC – Following this morning’s decision at the Supreme Court in Moore v. United...
By: Brian R. Frazelle
Corporate Accountability
June 13, 2024

RELEASE: Supreme Court’s Disappointing Decision in Starbucks Union Case Fails to Account for History

WASHINGTON, DC – Following today’s decision at the Supreme Court in Starbucks Corp. v. McKinney,...
By: Smita Ghosh
Corporate Accountability
May 30, 2024

Supreme Court gives New Yorkers second shot in escrow interest-payment fight

Courthouse News Service
WASHINGTON (CN) — The Supreme Court on Thursday gave New York homeowners another shot at...
By: Smita Ghosh, Kelsey Reichmann
Corporate Accountability
May 30, 2024

RELEASE: Grounded in Text and History, Today’s Decision is a Win for America’s Consumers

WASHINGTON, DC – Following today’s decision at the Supreme Court in Cantero v. Bank of...
By: Smita Ghosh
Corporate Accountability
May 15, 2024

The Fifth Circuit Is In the Tank For Corporate Power

Balls and Strikes
When the government does things that megacorporations don’t like, they know exactly where to go...