MARY AGNES CAREY: Welcome to Health on the Hill, I’m Mary Agnes Carey. The lawyers have spoken and the Supreme Court’s deliberations on the latest challenge to the health law will begin. In question are the law’s tax credits that help residents of nearly three dozen states afford health care insurance. The challengers say that the law clearly states that those premium subsidies be available only to exchanges established by a state and not in states that have deferred to the federally run marketplace. The law’s proponents say Congress intended everyone, no matter where they live, be eligible for the subsidies. Julie Rovner, a senior correspondent for Kaiser Health News, attended oral arguments at the Supreme Court and is here to give us the latest. Julie, welcome back.
JULIE ROVNER: Nice to be here.
MARY AGNES CAREY: You know this court and you know this case. What did you hear today that surprised you?
JULIE ROVNER: Well, actually, one of the first things that happened was Justice [Ruth Bader] Ginsburg asked about standing, and we weren’t sure whether this was going to happen. Of course, you can’t have a court case unless the people who are suing have something at stake. And there are four plaintiffs in this case – they are all from Virginia – and they all charge that because the Internal Revenue Service is allowing tax credits in the states where the federal government is running the exchange that they are now subject to the individual mandate penalty. Well, it turns out that three, and perhaps all four of them – there’s some question about that – so they went back and forth a little about standing, but the government said they weren’t going to challenge it. They’re going to presume at least one person actually would be injured and therefore has the right to bring this case. So there was discussion that we weren’t sure it was going to happen.
MARY AGNES CAREY: And that was right at the top.
JULIE ROVNER: Absolutely. The lawyer didn’t get six words out of his mouth before he got interrupted. [Ginsburg] said: “Back up. I want to talk about standing.” So people weren’t sure this was going to happen, because this came out fairly recently – that there was some question about whether these four plaintiffs actually would be hurt if the law continues as is.
MARY AGNES CAREY: And Justice [Anthony] Kennedy, I believe, raised this concern about coercion, and the subsidies and constitutionality. Can you take us through that?
JULIE ROVNER: In some ways, this really was part two of the case that they heard in 2012, even though that really was a constitutional case and this really isn’t. In that case, they ruled that the part of the law that required states to expand their Medicaid programs couldn’t continue because it was coercive to the state. So what Justice Kennedy was saying today was that if they read this sentence in the law the way the challengers are saying, that basically states would be given a choice between either setting up their own exchange or having their health insurance market be seriously, badly affected. Because of course, all the other requirements would happen, but there wouldn’t be any tax credits. And he said that could be coercive and that could give them a constitutional problem if they read it the challengers’ way.
MARY AGNES CAREY: Now the arguments seem to break down along partisan lines with the exception of Justice Kennedy, and we didn’t hear much from Chief Justice [John] Roberts. Do you take away any hints on how the court might actually rule on this?
JULIE ROVNER: You know, sometimes you can watch oral arguments and you get a pretty good idea of where they’re going. Last year when the court in the Hobby Lobby decision about contraception — pretty much what went on with oral arguments was what followed in the decision. That’s not usually the case and I think it really wasn’t the case today. Clearly the liberals were behind the government and the way the law is being implemented and the real conservatives were with the challengers. But the swing votes here are going to be — everybody assumes and they’ve assumed from the beginning — to be Justice Roberts and Justice Kennedy. And as you mentioned Justice Roberts was uncharacteristically quiet and Justice Kennedy had really tough questions for both sides. He questioned whether it was allowable to give the Internal Revenue Service so much power to basically be able to say: “Yes, we think that these tax credits should be available in the federal exchange.” So he could go either way, at least judging from what he said. You do really never know.
MARY AGNES CAREY: Do you think Justice Roberts was intentionally quiet, because there has been so many stories with headlines like ‘Justice Roberts In The Hot Seat’? That everybody is looking at him; how is he going to rule? Do you think he intentionally just decided today to not ask too many questions?
JULIE ROVNER: I have no idea what Justice Roberts was thinking, but that’s what everybody wants to know. Which way is he going to go in this case? Although if Justice Kennedy goes with the liberals then they wouldn’t need Justice Roberts. Nobody is quite sure how it’s going to come out and won’t know until June when we see it.
MARY AGNES CAREY: There’s a lot of concern among advocates for the law if the court decided to say people in federally run exchanges can’t get these subsidies, you’re going to have chaos in the insurance markets, it’s all or nothing. But, Judge [Samuel] Alito suggested an alternative today. What was that?
JULIE ROVNER: He did. He actually suggested that perhaps the Court could rule for the challengers but stay its ruling through the rest of the tax year, which would be another six months. That would give states, he said, and Justice Scalia said this too, states could still go ahead and create exchanges. But the Solicitor General Donald Verrilli who argued the case for the government said that it would take a lot more than six months for states to set up exchanges and it would, there are all kinds of obstacles. Not the least of which that there’s no longer federal funding for states to set up their own exchanges. And the states that did set up their own exchanges it took them, in most cases, at least a couple of years to do that. So, six months probably wouldn’t be sufficient whether the court would even do that.
MARY AGNES CAREY: Right. And there are some state legislatures that, I think you’ve written this in one of your pieces, that have said we prohibit an exchange, period. So they would have to change their own laws on that.
JULIE ROVNER: Well, mostly what they said is we prohibit the governor from doing it without us. But most of those state legislatures won’t be in session, so they’d have to come into session. You would need both the legislature and the governor to go along with it. They would need to spend their own money because there are no federal funds for it. It would be a big deal. And while there are some states that might do it, there’s already some states leaning towards doing it, there would certainly be, you know, many, many other states that would not do it.
MARY AGNES CAREY: How concerned is the court about Congress and/or the Obama administration stepping in to remedy a situation if the subsidies in the federal exchanges were struck down?
JULIE ROVNER: You know, in a case like this where they’re trying to interpret what Congress meant when it wrote this particular sentence, the court theoretically shouldn’t be looking at the possible outcome, but they all did. Both the liberals and conservative talked about the possibility of real problems in the state insurance markets if the federal exchange is not allowed to offer tax credits. And this is why I think the Republicans in Congress have wanted to reassure the court that something could be fixed. So as I mentioned Justice Alito said the states could create exchanges. Justice Scalia said, “Well, Congress can come in and fix this.” And the Solicitor General said, “This Congress, Your Honor?” And everybody laughed. This Congress is not really, A. inclined to fix it and B. able to get a whole lot done right now.
MARY AGNES CAREY: Thanks for the update, Julie Rovner with Kaiser Health News.