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Friday, December 9, 2016

Nov. 7 (Bloomberg View) — Thought you were done with the U.S. Supreme Court and health care? Think again. The Court has agreed to review the question of whether the federally created health insurance exchanges violate the law’s expectation that the exchanges be created by a state. Reading the tea leaves can only tell you so much about what the Court is going to do. But from the standpoint of the Barack Obama administration, there is reason to be curiously concerned that the president’s signature legislative accomplishment is in jeopardy once again.

The legal arguments are a bit arcane, and I laid them out in a column this summer. To give you the bare minimum, the case involves the public exchanges that the Affordable Care Act anticipated would be set up by the states and therefore described as “established by the state” in the law. Only 14 states plus the District of Columbia have created such exchanges. As a result, the federal government established exchanges on the states’ behalf. Clever lawyers seeking to block operation of the ACA argued that the exchanges are illegal because they were not established by states. The U.S. Court of Appeals for the Fourth Circuit rejected the argument in King v. Burwell. A divided panel of the U.S. Court of Appeals for the D.C. Circuit accepted the argument in Halbig v. Burwell by a 2-1 vote.

Here’s where things get technical — and interesting. The Obama administration had to make a strategic decision of whether they would appeal the D.C. Circuit decision against them. Or, instead, ask the D.C. Circuit to review the case itself through the mechanism of all its members sitting together as a single panel, en banc.

Somewhat controversially, the administration decided to ask for en banc review. It’s reasoning presumably was that it wanted to avoid the Supreme Court if possible. While the D.C. Circuit was considering whether to accept the case en banc, the administration could argue to the Supreme Court to hold off any appeals by the challengers who lost in the Fourth Circuit. If the D.C. Circuit were to reverse the panel, then the Obama administration could then have asked the Supreme Court not to accept an appeal by the challengers who lost in the Fourth Circuit.

This strategy was plausible — but it didn’t pay off. Without waiting for the D.C. Circuit to rehear the case, the Supreme Court agreed to hear the appeal from the Fourth Circuit brought by the law’s challengers.

What does this decision reveal, if anything? It takes four votes of Supreme Court justices to agree to take a case, so there is no guarantee that a decision to grant a review will dictate a particular outcome. Nevertheless, in this situation, it seems probable that the four liberal justices would have strongly preferred to wait for the D.C. Circuit in the hopes of avoiding the issue, as the Obama administration must also have wished. It seems safe to assume that none of those four justices would have agreed to hear the case at this stage.

The same cannot be said of Justices Antonin Scalia, Clarence Thomas, Samuel Alito and Anthony Kennedy. These justices all voted to strike down the individual mandate, which would have gutted the ACA. Presumably their hostility to Obamacare’s legality is unabated. It seems highly probable that those four would have cast votes to hear the case at this stage. By doing so, they avoided a scenario in which the D.C. Circuit reversed its panel, leaving no dispute among the appellate courts on the legality of the federally created exchanges. For them, a vote to take the case now is a strong signal that they would like to block the exchanges and sink Obamacare with this second legal torpedo.

The $64,000 question is: What about Chief Justice John Roberts? In 2012, Roberts split the baby. He voted to uphold the individual mandate and thus avoided banner headlines screaming that the Roberts court had struck down Obamacare. At the same time, Roberts blocked the element of Obamacare that would have essentially forced states to expand Medicaid. This part of the decision drastically reduced the scope of coverage under the law and therefore the law’s impact.

What will Roberts do now? He took substantial heat from conservative critics who were astonished and horrified to see the lifetime conservative betray the cause at its moment of potential judicial triumph. One possible interruption is that, scarred by this experience, Roberts would now go along with the conservative tide. The continuing unpopularity of Obamacare in opinion polls combined with the obvious weakness of President Obama after the midterm elections would provide some support for this possibility.

The other possibility is that Roberts will not deviate from his judicial restraint centrism. To strike down Obamacare now, having upheld it before, might look like opportunism or wishy-washyness. Given how weak the law increasingly appears, it would be a high price for Roberts to pay before the judgment of history if he now struck it down. Indeed, such a decision would vitiate his earlier restraints.

What seems almost certain is that the other conservative justices have decided to put Roberts to the test. They will not let him get away without standing up and being counted on Obamacare once again.  They have nothing to lose in any case by taking the gamble. For better or worse, the rest of us will be along for the ride. Stand by for a long six months of speculation while this case gets briefed and argued. A decision will come by the end of June. Its déjà vu all over again.

Photo: OZinOH via Flickr

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