When statutes are ambiguous, the courts often defer to the interpretation of the agencies implementing them. As long as the agencies' interpretations are reasonably in line with the statute and advance its goals, they generally have some flexibility in determining exactly how specific provisions ought to be implemented.
"If there's any ambiguity in the statute, the government is going to win here," said Chris Walker, a law professor at Ohio State University who clerked for Justice Anthony Kennedy.
Because King is not a challenge to the law itself, but rather to regulations issued by the IRS and the Health and Human Services Department, the Court could defer to those agencies even if it's not entirely sold on the Justice Department's position—as long as it's also not sold on the challengers'.
The challengers point to a section of the Affordable Care Act that refers to subsidies flowing through "an Exchange established by the State." And if you stop there, the case might look like an easy one. But they have had a much harder time convincing lower courts that Congress truly intended to limit subsidies to certain states.
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Subsidies are part of the law's incredibly complex, interconnected system. Obamacare guarantees coverage to sick people, and it offset the cost of doing so by including the individual mandate (a stick) and the subsidies (a carrot) to get healthier people into the system.
Congress would not have gone to such great lengths, setting up such a delicate balance, only to set it up to fail in certain states, the Justice Department argues.
To answer that point, the challengers say that Congress intentionally, explicitly limited subsidies to state-run exchanges because it wanted the states to set up their own marketplaces: The threat of residents losing subsidies, and insurance markets spiraling into chaos, was its own dramatic stick to get states to act, they argue.
No lower court has bought the challengers' view of congressional intent, and one federal Appeals Court judge was especially unfriendly to the challengers' interpretation.
"This argument is disingenuous, and it is wrong," D.C Circuit Court of Appeals Judge Harry Edwards wrote in a dissenting opinion in a similar case. "The simple truth is that Appellants' incentive story is a fiction, a post hoc narrative concocted to provide a colorable explanation for the otherwise risible notion that Congress would have wanted insurance markets to collapse in States that elected not to create their own Exchanges."
The Justice Department has gone to great lengths not to frame the case as a battle between the law's text and its purpose—a construction that would only make it easier for conservatives, particularly Chief Justice John Roberts, to invalidate the subsidies.