The Supreme Court handed the Obama administration a significant victory on Thursday, when it upheld a key provision of the Affordable Care Act that allows the federal government to keep distributing subsidies to help low-income Americans buy health insurance.
But the decision’s ramifications go far beyond an immediate win for President Barack Obama and the law. The Supreme Court’s ruling firmly entrenches the Affordable Care Act as the law of the land, leaving no room for a theoretical future Republican president to undo major pillars of the law in an executive fashion.
“The decision leaves no wiggle room for a future Administration that might have wanted to end the ACA’s subsidies,” Larry Levitt, senior vice president at the Kaiser Family Foundation, told Business Insider after the ruling.
That’s because the Supreme Court not only ruled the federal subsidies are legal under the Affordable Care Act, but it also did not leave any ambiguity that would allow a future administration to interpret the law differently.
“The court focused definitively and said, this is what the law means,” said MaryBeth Musumeci, an associate director at the Kaiser Commission on Medicaid and the Uninsured.
The challengers in the case, King v. Burwell, argued the way the law was written does not allow for the federal government to distribute subsidies to individuals in states that had not set up their own exchanges. They pointed to four words in the law that they argued meant exchanges should be “established by the state.”
A brief history: In 2011, the IRS issued a regulation that interpreted a part of the law in question to mean that the federal government could issue the subsidies. But in its opinion Thursday, the Supreme Court majority said that decision should not be left up to a government agency to interpret, since Congress did not make that explicit in the Affordable Care Act.
Instead, the high court disregarded the agency’s interpretation and ruled on the statute on its own. The IRS ruling, in effect, is null. The court said the decision should not be left up to the agency, which means a future administration cannot change that interpretation and alter the way subsidies are handed out under the Affordable Care Act.
“If the court had left in question about whether there should have been deference to the agency, that would have left the door open potentially for another administration running that agency to say, ‘OK, this is ambiguous language, and we have a different legal interpretation,'” Musumeci said.
Practically, this means that a theoretical future Republican president could not come in and say that the federal government cannot hand out subsidies.
That might not be a practical solution anyway: After all, by the time a Republican president could enter into office, millions of additional people would likely have access to subsidies as more people enroll in plans under the federal exchange. But there’s no longer even an option: The Supreme Court has definitively determined that the federal government can provide subsidies under the law.
“Because the Court has provided its own, definitive interpretation of the ambiguous statute — and held that it will not defer to the agency’s interpretation — a subsequent presidential administration (say, a Republican Administration) cannot reinterpret the statutory provision to prohibit tax subsidies in exchanges established by the Federal Government,” Chris Walker, an assistant professor at the Michael E. Moritz College of Law who clerked for Justice Anthony Kennedy, wrote on his blog Thursday.
Rick Hasen, a professor of law and political science at the University of California, Irvine, said the “biggest favour” Chief Justice John Roberts did for Obama was protecting the law’s legal entrenchment well into the future.
The biggest favour CJ Roberts did in Obamacare case was not applying “Chevron deference,” protecting interpretation from future President.
— Rick Hasen (@rickhasen) June 25, 2015
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