SCOTUS Could Also Disappoint Everyone

They're back!
They're back!
And now the results!

Last October, I predicted that the upcoming term of the Supreme Court would likely be remembered for two significant issues. First, whether the Equal Protection or Due Process clauses of the Fourteenth Amendment prohibit states from either defining marriage in order to prohibit same-sex marriage or refusing to recognize out-of-state same-sex marriages. Second, whether the latest legal challenge to President’s signature health law would be successful, thus making it likely that premium subsidies for Obamacare in more than half that states will no longer be available, striking a death knell to the program.

Legal briefs have been submitted, oral arguments have been held, and in the next few weeks the Supreme Court will decide both outcomes. If gay marriage and the future of Obamacare aren’t significant enough, the legacy of the Roberts Court may be cemented as the 2016 election may turn on these decisions, which may affect millions of Americans. Heady stuff.

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Most court analysts predict the Court will strike down marriage-equality bans as well as the refusal by states to recognize same-sex marriages in all other states. (I agree.) These same analysts believe that once again Justice Roberts will join the four liberals on the Court to turn away the latest legal challenge to Obamacare. (I wouldn’t bet my house on that.) A few analysts, however, are predicting the Court will disappoint everyone – liberals and conservatives, gays and fundamentalists, Republicans and Democrats. The Court does have a quirky habit of disappointing its followers.

In the gay marriage cases, it is possible that the Court will render a split decision, one that will require states to recognize out-of-state same-sex marriages, but at the same time establish that each state has the right to define marriage for those occurring within its own borders. What would result is a patchwork quilt of laws that defining marriage and lawsuits going on forever — one good reason why this scenario probably won’t happen. If it doesn’t, expect vitriolic dissents, multiple concurring opinions from Court members, and weeks, months and years of pontification and debate.

A wildcard Obamacare decision also could leave people scratching their heads, with both political parties continuing to rant and rave about how vital it is to elect their candidates.

The 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 IRS 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 via federal exchange was reasonable.

The Supreme Court will now decide the issue and, given the importance of the subsidy program to its overall success, Obamacare’s future may well hinge on the decision to be handed down in June. Most pundits see a close decision one way or the other, but don’t consider a third and much more confusing result: it could punt.

That is, the Court just might say the language in the Affordable Healthcare Act isn’t clear — and that it is up to the Executive branch to interpret what it means. So the Obama administration can say that their interpretation of the language is that subsidies are available to all who buy insurance through a federal exchange. However, a “new administration” — a different President — may interpret the language to say that subsidies are no longer available. This result would make the future of Obamacare even more dependent on who is elected President in 2016, thereby raising the decibel level on both sides of the issue.

Supreme Court watchers are usually limited to a select group of analysts and lawyers. This term the whole country should be watching. Don’t be surprised if very few are happy with the results.