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Affordable Care Act

Court Making Tough Call on Health Insurance

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U.S. Supreme Court

The Supreme Court could wipe away health insurance for millions of Americans when it resolves the latest fight over President Barack Obama's health overhaul. But would the court take away a benefit from so many people? Should the justices even consider such consequences?

By month's end, the court is expected to decide a challenge to the way subsidies, in the form of tax credits, are given to people who get their insurance through the Affordable Care Act. The legal issue is whether Congress authorized payments regardless of where people live, or only to residents of states that established their own insurance exchanges.

The distinction is potentially momentous, because more than two-thirds of the states did not set up their own exchanges. In those states, people rely on the federal healthcare.gov site to sign up for insurance. The financial benefits are substantial, covering nearly three-fourths of insurance premiums on average.

If the court rules that the subsidies can't be given to people who enrolled on the federal site, 7 million to 9 million Americans would quickly lose their insurance, said Nicholas Bagley, a health law expert at the University of Michigan and a supporter of the law known as "Obamacare."

"The consequences of a government defeat here are so extraordinary and sweeping," he said.

Since the New Deal, the Supreme Court has almost always upheld major new government programs and legislation as allowable under the Constitution. That was the case with Social Security in the 1930s, the civil rights legislation of the 1960s and, most recently, the health care law in 2012.

"After Social Security gets upheld in 1937 against various constitutional challenges, it then becomes an issue for the voters, but not a second-round judicial question for the court," said John Q. Barrett, a law professor at St. John's University in New York.

But the health law is different. It remains a bitter partisan fight, continuing to play out in the courts after efforts to replace Obama in the White House and repeal the law in Congress failed.

The current dispute turns not on some great constitutional question but a matter of statutory interpretation — or what the words of the law mean. This case comes down to the meaning of four words — "established by the state" — in a law of more than 900 pages.

One school of thought holds that the court should look only at what Congress actually wrote into the law, not what it might have intended.

"When the court is interpreting a text like it's doing in this case, then it really is not in the business of looking at consequences," said Ronald Cass, the former dean of the Boston University law school. "If you have a result that seems to be a bad one, that's for the political branches to say, not for the court to say."

The idea that Congress never would have created a system that was essentially designed to fail, by making health insurance unaffordable to so many people the law presumably was intended to help, is irrelevant, Cass said.

On the court itself, Justice Antonin Scalia is the most voluble proponent of the view that it's not his job to correct Congress' bad work. "Garbage in, garbage out," he has said.

Justice Stephen Breyer, on the other hand, has said Scalia's approach is too limiting because a law's words sometimes are not clear enough to resolve a case, especially when read in isolation. Context matters, and the real-world consequences of a law are part of that context, Breyer has said.