Court Monitor

Obamacare is now "SCOTUScare"

For millions of Americans, their participation in Obamacare is propped up by subsidies from the federal government in the form of tax credits. This law, whose official name is the Patient Protection and Affordable Care Act, provided for subsidies to flow to those who enroll on "an Exchange established by the State."

The plan was for the subsidies to induce states to establish health insurance exchanges under Obamacare. Under our system of federalism, Congress and the President are typically without power to order states to spend money on something. Obamacare could not order states to spend millions, but it could entice states to set up their own exchanges by offering these subsidies. As the architect of Obamacare, Professor Jonathan Gruber, publicly explained, "if you're a state and you don't set up an Exchange, that means your citizens don't get their tax credits. . . . I hope that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these Exchanges, and that they'll do it." The New York Times chimed in that "lawmakers assumed that every state would set up its own exchange." Robert Pear, U.S. Officials Brace for Huge Task of Operating Health Exchanges (Aug. 4, 2012).

But 34 of our 50 states said "no thanks" and refused to create state exchanges under Obamacare. With health insurance premiums scheduled to skyrocket later this year on the exchanges, those states avoided a problem. The federal government then created its own exchange in those 34 states, which include Texas, Florida, Arizona and North Carolina.

Next the IRS issued regulations that authorized the flow of subsidies to participants on the health insurance exchanges set up by the federal government, contrary to the statute that limited the subsidies to exchanges "established by the State." Litigation ensued challenging the lawfulness of these subsides.

The U.S. Supreme Court rescued Obamacare again, just as it had in the summer of 2012. Chief Justice John Roberts again wrote the opinion for the Court, in King v. Burwell, and was joined by Justice Kennedy and the left wing of the Court.

Chief Justice Roberts penned admiration for Obamacare, claiming that it "grew out of a long history of failed health insurance reform." His prose made clear that the Chief Justice buys into liberal spin about the purpose of Obamacare to usher in a new era of enlightened health insurance. Roberts waxed fondly about how the "adverse selection" of people declining insurance until they need it is avoided by Obamacare, and how "an economic 'death spiral'" of rising premiums and cancelled policies is supposedly averted by this "reform" which, in fact, consists of forcing people to buy insurance. To rescue Obamacare, Chief Justice Roberts ruled that its statutory phrase "Exchange established by the State" actually means, as Justice Scalia lampooned in his dissent, to include an "Exchange not established by the State."

Justice Scalia, joined by Justices Thomas and Alito in dissent, observed that "Obamacare" should now be called "SCOTUScare." In Justice Scalia's words, "the Supreme Court of the United States (SCOTUS) favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites."