Supreme Court Hears Arguments in Obamacare Case: Slate's Dahlia Lithwick Explains

On March 4, 2015, the Supreme Court heard arguments in King v. Burwell, a case challenging the validity of tax credits under the Affordable Care Act for lower-income Americans who have bought their health insurance policies through the federal exchange rather than state ones. There are thirty-four states that do not have their own exchanges, so residents of those states have had to use the federal exchange instead. In this report, Slate Senior Editor and Legal Correspondent Dahlia Lithwick discusses the case and what is at stake for Obamacare.

Dahlia Lithwick

Dahlia Lithwick

Lithwick notes that, compared to the Obamacare case considered by the Supreme Court in 2012, the King case is very much under the radar. The King case seems smaller, but it could be very big. The thing that led to this case was an apparent assumption in the Affordable Care Act that states would all create their individual insurance exchanges. Thirty-four states chose not to do so. Residents of those states had the option of buying insurance through the federal exchange, and so they did.

The King case hinges on four words in the Affordable Care Act that seem to imply that tax credits are only available to people who purchased their insurance through state exchanges. In other words, Lithwick explains, the case is concerned with statutory interpretation. One obvious question when considering the meaning of the words and the legislative intent is whether the statute was written using the language in question to encourage states to create their own exchanges. In Lithwick’s opinion, this point of view emerged later. There isn’t a body of evidence clearly showing that this is what the Congress had in mind.

Lithwick points out that a win for the plaintiffs in this case could have “near catastrophic effects” on the people in the thirty-four states who bought their insurance on the federal exchange. Such an outcome could force premium rates higher, causing some people to drop out of the program simply because of the expense involved. This could lead to an extreme situation where only the very ill are still insured. This could lead to a “death spiral” where eventually insurers couldn’t afford to insure anyone. No one would really benefit from this, and there are no plans at present to resolve the problem.

Lithwick is pessimistic about the chances that anyone from either political party will be able to come up with a solution, let alone a bipartisan plan that everyone would support. She notes that Congress is struggling with funding the Department of Homeland Security, a much simpler problem than fixing Obamacare. Lithwick suggests that the King decision will be a very close one where Chief Justice Roberts will be the fifth vote on either side of a 5-4 decision.

Dahlia Lithwick is a senior editor and legal correspondent for Slate. She has covered the Microsoft trial and other legal issues. Before joining Slate, she worked for a family law firm in Reno, Nev., and clerked for Procter Hug, chief justice of the ninth Circuit Court of Appeals in 1996. Her work has appeared in the New Republic, Commentary, The New York Times, The Washington Post, Elle and on CNN.com. She is a weekly legal commentator for the NPR show, Day to Day, and a columnist for the New York Times. The Legal Broadcast Network is a featured network of the Sequence Media Group.