Yesterday’s Supreme Court decision has been touted as everything from unconstitutional to a major victory. But no matter what you think, the ACA has more time with us—so where does that leave us?
The majority opinion made it clear that they were voting to prevent the so-called “death spiral” that might result in an alternative interpretation.
“It is implausible that Congress meant the Act to operate in this manner,” wrote Chief Justice in his opinion. “Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation. But those requirements only work when combined with the coverage requirement and the tax credits. So it stands to reason that Congress meant for those provisions to apply in every State as well.”
But that reasoning came as a stark contrast to how Chief Justice Roberts and the majority voted in Baker Botts LLP v. Asarco LLC, as Eric G. Pearson wrote before the King v. Burwell decision for Wisconsin Appellate Law:
Here is the paragraph [from the Baker Botts LLP v. Asarco LLC opinion] in full:
More importantly, we would lack the authority to rewrite the statute even if we believed that uncompensated fee litigation would fall particularly hard on the bankruptcy bar. “Our unwillingness to soften the import of Congress’ chosen words even if we believe the words lead to a harsh outcome is longstanding,” and that is no less true in bankruptcy than it is elsewhere. Lamie v. United States Trustee, 540 U.S. 526, 538 (2004). Whether or not the Government’s theory is desirable as a matter of policy, Congress has not granted us “roving authority . . . to allow counsel fees . . . whenever [we] might deem them warranted.” Alyeska Pipeline, supra, at 260. Our job is to follow the text even if doing so will supposedly “undercut a basic objective of the statute,” post, at 3. Section 330(a)(1) itself does not authorize the award of fees for defending a fee application, and that is the end of the matter.
It’s not hard at all to imagine the Court’s using a similar rationale to deal with arguments concerning the dire consequences of the literal interpretation proposed by the opponents of the Affordable Care Act in King.
“In Baker Botts Roberts essentially said that ‘our job is to follow the text, and we follow what the text says even if the result is disaster, because our duty is to do what Congress wrote.’ But the last page of King v. Burwell talks about how those credits are necessary for the state to avoid a calamitous result,” said R. Pepper Crutcher Jr., partner with Balch & Bingham and author on the Affordable Care Act Review Blog.
“So how do you square those two opinions, one joined and one written, that seems to say diametrically opposing things?…From here I think the person who has the toughest job is the person teaching the law school courses that has to figure that out.”
In many ways, Crutcher doesn’t believe we’ve seen the last of this case. Given the contradictory nature of the opinions, he anticipates many classes and law journal articles dissecting the subject in the months to come. And unless the Court decides that they saw their role as taking a “horribly crafted law and try to make it work,” appellate lawyers may be quoting and citing the decision, trying to get the judges to reach similar decisions for them.
But one way he doesn’t foresee any new developments? The numerous challenges the Act still faces, including a case from the House of Representatives that alleges the administration illegally delayed an ACA mandate for employers, and unconstitutionally funded individual subsidies with money Congress refused to appropriate.
Chief Justice Roberts’ interpretation—which doesn’t defer to either the IRS nor the ACA petitioners—doesn’t rely on regulation from the federal government to exist. It determines the meaning of the statute for all time, depriving any incoming administration of a chance to change the rule. And though anyone who likes to debate the proper scope of judicial decision making will be interested in this case for a long time, Crutcher thinks one thing is clear in this ruling.
“This greatly dims prospects for future “silver bullet” cases against the ACA. Justice Kennedy wrote a really strong 2012 dissent and chastised Justice Roberts, just as Justice Scalia [did Thursday.] Now, Kennedy joins Roberts,” said Crutcher. “I think they’re trying to say ‘Enough; we’ve had it with Affordable Care Act litigation,’ and they are slamming the door as hard as they can. There may be exceptions, but I think cases [like the House of Representatives challenge] is dead on arrival at the Supreme Court.”
That means we’ve side-stepped the issue of whether employer mandates needed to be enforced in states where subsidies ceased to be made available. But any employers who have held out hope that Congress or the courts would take away their need for ACA compliance are in for a very rude awakening.
Crutcher has seen a lot of employers who are not well acquainted with the requirements of the ACA, and expects that as we get into 2016—if the government enforces the employer mandate—we’ll start seeing a lot of seemingly unbelievable audits and assessments who are unable to deal with ACA compliance.
“The Affordable Care Act’s been a law for five years and yet employers are going to generally be stunned by taxes and penalties they owe. Some have been holding out hope for so long that they’re going to be rescued, and don’t want to apply. Part of that is politicains saying ‘we’re going to rescue you;’ part of that is the administration kicking the can down the road, lapsing requirements and delaying effective dates,” said Crutcher.
“Lawyers like me are seen like we’ve been crying wolf this whole time. Well, surprise, the wolf’s coming.”