Two individual judges who have heard the case based on these particular words have dismissed it pretty much out of hand. First, as legal scholar Timothy Jost has pointed out, if one reads other sections of the law alongside Section 1311—Sections 1312, 1321, and 1453—it is abundantly clear that Congress created a fallback of federally run exchanges for states that failed to establish their own, defined all exchanges including the federal ones as being "Exchanges established by the State," and made clear that all Americans are residents of states that established exchanges.
Second, it is quite clear what Congress's intent was—and it was not to exclude millions of Americans from the benefits of the law because their states capriciously decided not to establish their own exchanges. The plaintiffs in these cases claim otherwise: that Congress wanted to coerce states to set up their own exchanges by denying the residents of the recalcitrant states any subsidies. It is pretty easy to determine congressional intent in this case—by asking the drafters of the law what their intent was. Five principal drafters—Max Baucus, Tom Harkin, Henry Waxman, Sander Levin, and George Miller—wrote a friend of the court brief making it crystal clear that their intent was to provide benefits and subsidies to all who are eligible.
So why worry? A three-judge panel of the D.C. Circuit that heard the case—the panel whose ruling is imminent—included one Republican-appointed judge with an exceptionally conservative reputation, A. Raymond Randolph, who made it abundantly clear that he would rule for the plaintiffs, and another Republican-appointed judge, Thomas B. Griffith, who could well join him. If this occurs, it will likely have no legal effect for many months. This is because the decision will be put on hold as soon as the Justice Department exercises its option to seek immediate review of the panel's decision by the full complement of judges on the D.C. Circuit. With four Obama appointees recently confirmed as a result of the Senate's 2013 abolition of filibusters for appeals-court judicial nominees, the circuit's final decision will likely affirm the district court's dismissal of the challenges. The Fourth Circuit panel handling its case indicated, during its oral argument in mid-May, that it, too, will probably affirm the trial judge's dismissal of the case.
Two other similar cases, in federal district courts in Oklahoma and Indiana, are wending their way up through their respective circuits. There are no tea leaves yet to predict results in those two cases; ultimately, they could yield a divided outcome, ensuring Supreme Court review. And there is no assurance that the Roberts Court, which came within an eyelash of declaring the entire ACA unconstitutional in the NFIB case, would dismiss this challenge. Justice Antonin Scalia, in particular, has been dismissive of congressional intent, even if this past June, he reaffirmed recognition of an interpretational approach friendly to the Obama administration's case—"the fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme." But Scalia has frequently ruled based on narrow, literal reading of words taken out of context in statutes to satisfy his ideological and political predilections. Were he to do so in this assault on the Obamacare exchanges, he would very likely have his two amigos, Samuel Alito and Clarence Thomas, with him. He might well also have Justice Anthony Kennedy, who joined a dissent fiercely hostile to the ACA two years ago, when the individual mandate was upheld by one vote—that of Chief Justice John Roberts. Would Roberts go against them again, cognizant of the heavy political consequence of stripping millions of Americans of health insurance purchased with the help of ACA tax credits and subsidies? Who knows?
Court challenges that in the past would have been dismissed out of hand are not anymore, in an era in which the federal judiciary, especially the Supreme Court, is polarized and tribalized along the same lines as Congress. Reason enough to be concerned about the future of health reform.