WASHINGTON—The Supreme Court on Wednesday weighed whether to strike down a centerpiece of the Affordable Care Act, hearing arguments in a case that will shape the future of the law.
The hour-long session, which began shortly after 10 a.m., featured a head-to-head match between U.S. Solicitor General Donald Verrilli, the Obama administration’s top lawyer before the court, and Michael Carvin, a lawyer for conservative and corporate causes who has guided two health-law lawsuits to the high court.
The justices in King v. Burwell are considering a legal challenge to the tax credits in the 2010 law that is the defining domestic achievement for President Barack Obama. The court is deciding whether language in the law allows the credits to go to lower- and middle-income individuals across the country or is limited to people in states currently operating health-insurance exchanges. The distinction is important because only 13 states and the District of Columbia currently operate an exchange, while more than 30 states are relying on the federal government’s HealthCare.gov system.
The challengers argue the words “established by the state,” contained in the lengthy statute, limits distribution of the tax subsidies.
“If the rule of law means anything, it is that text is not infinitely malleable, and that agencies must follow the law as written—not revise it to ‘better’ achieve what they assume to have been Congress’s purposes,” Mr. Carvin said in a court brief.
The Obama administration calls the assertion absurd. “All the tools of statutory interpretation—text, structure and design, purpose, history, and consequences—point to the same answer: tax credits are available on the exchanges in every state,” Mr. Verrilli wrote in a brief.
Most observers expect today’s arguments to reflect an ideological divide among the justices. They split deeply during the last health-care case, with Chief Justice John Roberts providing the crucial vote to uphold the Affordable Care Act’s mandate that individuals carry insurance or pay a penalty.
Early in the arguments, Justice Ruth Bader Ginsburg questioned Mr. Carvin about the four individuals who have brought the case, and their ability to show they had been harmed by the law’s tax credits.
The Wall Street Journal has reported two male plaintiffs in the case could be subject to a dispute over their legal standing to sue, because as Vietnam veterans they likely qualified for care through the Department of Veterans Affairs. A third, female plaintiff listed short-term-stay motel as her address when she joined the lawsuit.
A decision is expected by July and could be among the most significant for the high court in recent years.
The case involves four Virginia plaintiffs, led by David King of Fredericksburg. Virginia is among the states that didn’t set up its own exchange, where people can compare insurance plans and apply for coverage.
The challengers argue the federal government’s distribution of tax credits in Virginia forces them to choose between purchasing subsidized coverage or paying a penalty for going uninsured.
Without the tax credits, they would find insurance unaffordable under the law’s definition and wouldn’t be penalized if they didn’t have it.
The federal government currently operates exchanges on behalf of 37 states. More than six million people had used HealthCare.gov to obtain tax credits to offset the cost of their premiums as of mid-January. For some, the credits are worth hundreds of dollars a month. Those tax credits could be voided if the court sides with the challengers. Millions more people remain uninsured in those states.
Supporters of the law, including Health and Human Services Secretary Sylvia Mathews Burwell, say it is unthinkable that the drafters of the law meant for the credits to go to some states but not others. Ms. Burwell’s department oversees HealthCare.gov and the distribution of credits to its users, and she is the first named defendant in the case.
Both sides agree that without the credits in much of the country, the law could rapidly become unworkable. The credits are a central element of the law, tied closely to the requirement that most Americans carry health insurance or pay a penalty, and the prohibition on insurers rejecting customers based on their medical history.
Republicans and groups backing the case see it as their best chance now to unwind the law. They have ratcheted up their efforts in recent weeks to reach agreement on the party’s alternative, and are expected to continue to debate this ahead of the court’s decision.
Read more: Supreme Court Hears Arguments in Key Health-Law Case
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