Supreme Court Telegraphs Huge Blow To Obamacare?

Extra "ordinary": Associate Justice Antonin Scalia
Extra "ordinary": Associate Justice Antonin Scalia
Extra “ordinary”: Associate Justice Antonin Scalia

While the recent headlines coming out of the Supreme Court were all about its decision to rule on whether the Constitution protects same-sex marriage, a few people noticed a huge heads-up on what may be coming down the pike concerning Obamacare.

There were no headlines and very few people noticed a decision by the Court, Whitfield v. United States, handed down on Jan. 13. It held that bank robbers are subject to mandatory 10-year sentences if they force others to accompany them, even for a very short distance.

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Obamacare is not anything like bank robbery, despite what many Republicans say. But in a unanimous opinion, Justice Scalia reminded us that language in legislation must be given its “ordinary meaning” and that legislative history does not necessarily inform the Court’s understanding. In Whitfield, the question was whether a short movement — when Whitfield made 79-year-old Mary Parnell move with him from her living room to another room, some nine feet — is enough to subject him to prosecution under a 1934 law that imposes mandatory sentences when a criminal “forces a person to accompany him” during a bank robbery or while fleeing. Quoting old newspaper articles, Scalia wrote:

The word does not, as Whitfield contends, connote movement over a substantial distance. It was, and still is, perfectly natural to speak of accompanying someone over a relatively short distance, for example: from one area within a bank “to the vault”; “to the altar” at a wedding; “up the stairway”; or into, out of, or across a room.

He added examples from English literature, quoting passages from Jane Austen and Charles Dickens to emphasize the point that Congress may have had John Dillinger driving off with hostages in mind when it crafted that 1934 law, but “it enacted a provision which goes well beyond that.”

Again: what does John Dillinger have to do with the future of Obamacare? The latest legal challenge to the President’s signature health care law involves Section 36B of the Internal Revenue Code, enacted as part of the Affordable Healthcare Act, which allows the Internal Revenue Service to provide subsidies to individuals who buy health insurance through “state-run exchanges.” Legislative history indicates that lawmakers assumed that every state would open an exchange, but 27 states chose not to do so. In those states, the federal government created a federal exchange, and the IRS extended subsidies to individuals purchasing insurance through this exchange.

In Halbig v. Burwell, a federal appellate court in Washington, D.C., found that the text of Section 36B unambiguously restricts subsidies to insurance bought on an exchange “established by the State.”

A federal appellate court in Richmond, VA, reached the opposite conclusion in King v. Burwell, concluding that the IRS’s extension of subsidies to those who bought Obamacare through the federal exchange was reasonable.

The Supreme Court will now decide the issue and, given the importance of the subsidy program to the overall success of Obamacare, its future may well hinge on the decision likely to be handed down in June 2015.

It is worth emphasizing once more that the Whitfield decision was unanimous and predominantly based on a plain reading of the English language, not on legislative intent, not on assumptions, not on history. It is hardly a stretch to argue that the “plain meaning” of the words “established by the State” do not mean an exchange created by the federal government. And therefore the logic in Whitfield may serve as precedent.

I am not privy to the Court’s inner workings. But were I counting on the language in Section 36B to be broadly interpreted, Scalia’s opinion for a unanimous Court would seem very troubling indeed. Artful lawyers will of course articulate why Whitfield is apples and Obamacare is oranges (and not lemons). It is equally possible, however, that the Court did send a signal through Whitfield. Oral arguments will be heard this spring, and if Charles Dickens and Jane Austen make their way into the questioning, don’t be surprised by the ruling.