Pro-business Conservatives and the Affordable Care Act

For the third time in four years, the fate of the Affordable Care Act rested with the United States Supreme Court.  Early this morning, by a 6-3 vote, the United States Supreme Court kept the Affordable Care Act (and the health insurance industry) alive.  If you look at all three case over the past four years, the key votes on the Supreme Court have belonged to the two pro-business conservatives (Justice Kennedy and Chief Justice Roberts).  The remaining justices have been predictable — the liberals supporting the Affordable Care Act and the three ultra-conservatives opposing.  If the past is any predictor for the future, any remaining challenges to the Affordable Care Act may rise or fall on what’s good for business.

The issue this time around was both simple and complex — the availability of subsidies for the purchase of health insurance.  In some clauses in the Affordable Care Act, the law referred to the subsidies as being available on health care exchanges “established by the state.”  Other provisions seemed to indicate that, at least for some purposes, established by the state included exchanges established for the state by the federal government when the state government failed to act.  Given that 34 states are relying on the federal government to run their health insurance exchange, the answer to the question had a potential for a very big impact across the country.

There were interpretive arguments for both sides in this issue.  When the language in a statute is clear, that language should control.  However, when one provision in a statute seems to conflict with another provision, the language in the statute is not clear.  In many cases, when the language is not clear, the Supreme Court will give the agency with authority over a regulatory statute the discretion to interpret the statute.

In holding that the subsidies were available in the 34 states that did not have a state-run exchange, the Supreme Court opted to hold that, after considering all the relevant statutory provisions and the plain intent of Congress in passing the Affordable Care Act, Congress could not have meant to condition an individual’s right to a subsidy on whether her state established and ran its own exchange.  The Supreme Court opted not to defer to the interpretation of the I.R.S. (meaning that this decision is not subject to change by the next administration).

Chief Justice Roberts, writing for the six justices, took some gratuitous swipes at the drafting process.  Anybody who has been involved in any major legislation knows that there are always errors in any large bill.  That’s why Congress frequently spends the next year or two passing technical correction bills.  Unfortunately, the current majority in the House and the Senate have no desire to fix minor flaws in the Affordable Care Act.

The key part of his opinion, however, is his interpretation of the law in light of Congress’s intent.  In Chief Justice Roberts’s view, an interpretation of the bill that would limit subsidies would not support the intent of Congress to make health care more accessible or more affordable.  Instead, it would drive insurance companies out of business in those states without a state run exchange.

This reasoning about what is good for business drives not only this opinion, but potentially the earlier decisions as well.  The individual mandate was good for business — forcing millions of Americans to purchase health insurance from insurance companies.  The Medicaid expansion, however, was bad for business, giving millions of Americans an alternative to purchasing health insurance.  And forced contraceptive coverage was an infringement on the religious freedom of businesses with no perceived benefit to those businesses.  It also potentially drives other decisions — both those cases still pending this term and in future terms.  Many folks like to use “conservative” and “liberal” to describe the members of the Supreme Court.  However, there are many different types of conservatives and many different types of liberals.  There are many issues in which the interest of the business community and the interests of liberal activists mesh.  In those cases, it is very possible to put together a majority behind a “liberal” result.

With five cases left (and two or three days on which the opinions will be issued), we will see what the business model tells us about the opinions to come.  On same-sex marriage, the business community has been supportive of the LGBT community, wanting one uniform rule of marriage across the entire country say that marital rights will not hinder their ability to locate their businesses where they see fit or recruit the best employees possible.  On EPA regulations, the business community wants as few regulations as possible.  Especially, on these two cases, we will see how important what is good for business matters to the Supreme Court.

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