Advocacy Groups Close Ranks on Federal Exchange Case

January 29, 2015 Updated: January 29, 2015

Health advocacy groups have lined up to defend the legality of the federal insurance exchange as the first hearing for King v. Burwell nears. 

A Supreme Court ruling in favor of the plaintiffs could spell the end of the federal exchange, which is used by 36 states, and affects how Americans in those states receive their health care subsidies. 

Families USA, a liberal health care non-profit, filed a brief with the Court Wednesday defending the legality of the federal exchange. The plaintiffs argue that the current federal exchange is illegal because the Affordable Care Act (ACA) stipulates that the subsidies must be calculated based on policies from “an Exchange established by the State.” 

The defending brief claims that the federal exchange is legal because the text of the law doesn’t expliclity forbid it as such. 

“If there were such an incongruity between State and federally-facilitated Exchanges, one would expect the subpart of the statute dealing with eligibility for subsidies to say outright that families in States with federally-facilitated Exchanges are ineligible to receive assistance. It does not,” the brief reads. “[The] petitioners quarantine six words from the next subsection, which deals not with eligibility for subsidies, but rather the formula for calculating them.” 

Conservatives are more confident that this time, unlike in 2012, the Supreme Court will likely hand out a ruling “against” Obamacare because the case deals with statutory, and not constitutional, law. The plaintiffs in King v. Burwell accuse the Obama administration of not dutifully carrying out the ACA, whereas the 2012 case involved the constitutionality of the individual mandate, which forces people to get health care insurance. 

“In 2012, Chief Justice John Roberts argued that the court had an obligation to try to read the law in a way that made it consistent with the Constitution,” Ramesh Ponnuru wrote for Bloomberg. “That reading didn’t have to be the most natural one so long as it was plausible. In this case, though, the Constitution is not at issue and is therefore not a reason to read the law one way or the other.” 

Supporters of the federal exchange have also appealed to practical concerns, predicting that a dissolution of the federal exchange could leave anywhere from around 4 to 10 million people without health insurance. 

A brief filed Tuesday with the Supreme Court by the American Heart Association and other health care lobbying groups argues that Congress intended for a federal exchange to exist when it passed the Affordable Care Act, and that a decision by the court in favor of the plaintiffs in King could endanger the health of millions. 

“If the Court voided premium tax credits in the federal marketplace, an estimated 9.6 million people in 34 states would no longer be able to afford health coverage, leaving most of them no choice but to become uninsured,” the advocacy groups said in a statement. “We would have objected even more strongly to any legislative provision that used patients’ well-being as a bargaining chip to induce states to establish their own exchanges.” 

Some health care experts are skeptical that such a ruling would result in the loss of insurance for so many people, and Senate Republicans have previously proposed an alternative to the current system that would provide subsidies to low-income Americans through tax credits. 

“It’s likely that by the time the Supreme Court actually gets to the hearing in King v. Burwell, we’ll be well done with open enrollment for the second year, the question is whether the Court would order the IRS to stop providing subsidies to everyone immediately,” said Yevgeniy Feyman, a fellow at the Center for Medical Progress.”I think it’s likely that they would stay their decision or hold off enforcement until current policy year ends for people, or else you’d see a lot of chaos all at once.” 

The first hearing is scheduled for March 4, and a decision is expected by the summer of 2015.