Breaking Down The Supreme Court Ruling On Obamacare Subsidies
RENEE MONTAGNE, HOST:
In a ruling that affects millions of Americans, the U.S. Supreme Court has upheld the tax subsidies that support the Affordable Care Act. That 6 to 3 ruling is a major victory for what's come to be known as Obamacare and for the president. The challenge to the health care subsidies rested on a single phrase - that the federal government would subsidize patients in health exchanges that are, quote, "established by the state." The question for the justices was did the law only apply to subsidies set up by the states themselves and not the federal government? For more, we're joined now by NPR's national political correspondent Mara Liasson and NPR's Nina Totenberg at the Supreme Court. Good morning.
NINA TOTENBERG, BYLINE: Good morning.
MARA LIASSON, BYLINE: Good morning.
MONTAGNE: Nina, let us begin with you telling us what exactly did the court rule.
TOTENBERG: Chief Justice John Roberts, writing for the court, sided with the administration's interpretation of the act. He said that this law was based on interlocking reforms in order to cover more people with insurance and to prevent a death spiral and that it was meant to set up exchanges in any - in all of the states and that if the states didn't do it themselves that the federal government would step in to do it in their stead. And he said that were the act read in any other way, it would be contrary to what the clear meaning of the plan that Congress adopted was. And therefore he and five other members of the court - six members of the court - voted to uphold the law as is.
MONTAGNE: And, just to be clear, what if the court had ruled the other way? What would that have meant?
TOTENBERG: Well, it would've meant that at least six-and-a-half million people, and possibly as many as eight or nine million people, would have been thrown off of their - the subsidy - they would no longer get subsidies. They would no longer qualify for subsidies because they were in the - one of the 34 states that has refused to set up exchanges on their own. And that would mean that they wouldn't be able to afford insurance. Many people would not be able to afford insurance. The prices would begin to skyrocket, and the chief justice, in his opinion, noted that that would lead to a death spiral and that we have plenty of history to have proved that.
MONTAGNE: And the argument by the three dissenting judges - justices.
TOTENBERG: Justice Scalia spoke for the three justices in dissent. Justice Alito and Justice Thomas joined his opinion. He said that the act that Congress passed makes tax credits available only on an exchange established by the state and that the court was doing somersaults to conclude something else. So it rewrites the act to make tax credits available everywhere. We really should start calling the law SCOTUS care, he said. SCOTUS is short-term for a Supreme Court of the United States.
MONTAGNE: Well, Mara Liasson, let's bring you in here. The White House has got to be pretty happy about this. The president had admitted he didn't really have a plan B if the court had ruled against him.
LIASSON: No, and he always said this case never should have been brought. He will be coming out and speaking in about 20 minutes from now, so the White House is very, very happy. Democrats are very, very happy. And Republicans, I think, are secretly and privately breathing a sigh of relief because if they had - the court had ruled the other way, the mess would've landed squarely in Congress's lap. Polls show that majorities of people wanted Congress to fix the law if that happened and Congress - and the Republicans could not agree on what that fix would be. They've been talking about repealing and replacing Obamacare for years, but they've never come up with the replace part.
MONTAGNE: Well, yes, there's an irony in this, and we've spoken of this, Mara, that the Republicans might even be secretly happy (laughter) that it came out this way.
LIASSON: I think they were secretly relieved. There's no doubt about it. It gets them off the hook. They can continue to run against Obamacare in the Republican primaries - the presidential primary - because there are a lot of voters in those primaries, of course, that dislike Obamacare as much as ever. But they don't have responsibility for the results - six-and-a-half million people without insurance - what were they going to do? They couldn't agree on what to do. So now they can just be in opposition instead of being responsible for the mess.
MONTAGNE: Now, this is a question I could put to either of you, whoever wants to answer it, and that's this - we're talking about, as you said, Nina, six to nine million people possibly affected by this. But we're - there's a direct effect. That would be those people where the health insurance exchanges were set up by the federal government in those states....
TOTENBERG: Would've lost their subsidies.
MONTAGNE: Mostly, by the way, red states, right? And they would've lost their subsidies, but what about the other states where, you know, that it was perfectly clearly legal? That is, the state set up these exchanges. It would've also affected them, right?
TOTENBERG: Well, they would've kept their subsidies, but, you know, you're talking about a divided country in terms of benefits then. And it would've led to an incredible political mess for, I think, for the Republican Party principally, but it wouldn't have been easy for Democrats either. You know, what is interesting to me about this case is that this was a 6 to 3 decision. This case was brought essentially by activists - conservative activists - who - some of whom went around the country persuading leaders in some of these states not to set up their own exchanges and to let the federal government do it instead and then found what they initially called this loophole and later expanded to be a much more frontal attack on the law. And they brought this case. And when six members of the court, including the chief justice, who's quite conservative, and Justice Kennedy, joined the more liberal members of the court, it sort of is a repudiation to the idea that you're - we had a tough time. We upheld the law 5 to 4 three years ago. Now stop nickel and diming us is basically, I think, what this says. We know what Congress was doing here. It was inartful - often at best inartful - in its language, but it's clear what they were trying to do.
LIASSON: And yeah - and I think it also sends the message that if you want to get rid of Obamacare, you need to elect a Republican president. You're not going to be able to do it through the courts. The constitutionality of the law has been upheld, and now the statutory question has been resolved. So I think if Republicans want to do something, unravel or repeal the law, they need control of the White House as well as Congress.
MONTAGNE: Well, you know - you know, when I was speaking a moment ago about the effect, though, this - could this law have survived losing six to nine million people's - the subsidies for something like six million people?
LIASSON: I think it would've been very, very difficult because if you remove those people from the health insurance market you go into what's called a death spiral, which is - the decision talked about this. Health insurance only works when you have sick and healthy people together in the pool subsidizing each other, in effect, and the only people who would have stayed in, if the subsidies for six-and-a-half million people were removed, would be the sickest people. Insurance premiums, as Nina said, would've skyrocketed because the pool would've been smaller and sicker, and, yes, I think it would've had an unraveling, undermining effect on the law itself. And interestingly enough, the majority of the people who get subsidies live in red states, the states that didn't set up their own exchanges because those states are generally in the south and they have higher numbers of people who are impoverished.
MONTAGNE: Now, politically, we had - this was a big - a big win for President Obama. Back in 2012, that was a big subject of discussion on the - during the presidential race. What about 2016?
LIASSON: I think that it will still be an issue in the Republican primaries because Republican primary voters dislike the law as intensely as ever. I think what you saw in 2014 is it became a less passionate argument in the elections. Some of the heat was leached out of it and I think you will see that trend continue in the general election in 2016. It just won't be the number one motivating issue for Republicans.
TOTENBERG: And, you know, the longer that a law like this is on the books and it starts to be better administered over time, the more difficult it is to get rid of it.
MONTAGNE: Well, that's what - just what I was going to ask you, Nina. I mean, this is now - what - how - when - from the outside, those of us who don't know, it does seem though like the Supreme Court has said this is established law. You've just said something like that. Go home, you know? This is - we've decided.
TOTENBERG: Well, they said we decided, but it's up to Congress to decide, and the chief justice specifically said in the last paragraph of his opinion we - our job is - we are not the people who write laws, and we're supposed to be deferential to the people who write laws where at all possible. We're not elected. The people are elected. If they want to change it, they can change it. But - this is me speaking, not the chief justice - but the longer it's on the books, the more it starts to work well, the harder it is to get rid of it.
LIASSON: And, you know, there's another factor here, which is the business community. And we have seen in so many cases, whether it's laws about gay marriage, whether it's the Confederate flag, when the business community weighs in on something, it is a big thumb on the scale of Republican thinking and conservative thinking. And the business community, the health care industry, the health insurance industry, did not want this law unraveled.
TOTENBERG: And all of the big conservative business groups that were joined in the initial attack on Obamacare were not there this time. The chamber of commerce was not there. It was on the sidelines.
MONTAGNE: Well, thank you very much both of you.
TOTENBERG: Thank you.
LIASSON: Thank you.
MONTAGNE: That's Nina Totenberg, speaking to us from the Supreme Court, and NPR's national political correspondent Mara Liasson on the Supreme Court upholding tax subsidies that underpinned the Affordable Care Act. Transcript provided by NPR, Copyright NPR.