John Roberts Saves Obamacare, Again

The Court upheld the health care law's insurance subsidies in every state.

A guard stands on the steps of the Supreme Court Building, August 20, 2014 in Washington, DC. (Photo by Mark Wilson/Getty Images) (National Journal)

Obamacare dodged yet another existential threat Thursday at the Supreme Court, making the law's survival more assured than ever before.

In a 6-3 ruling written by Chief Justice John Roberts, the Court upheld Obamacare's insurance subsidies nationwide, rejecting a potentially devastating lawsuit that had aimed to ax those payments to people in 34 states.

The ruling is a huge relief for President Obama, whose signature domestic achievement was on the line; and for Republicans, who were deeply divided over possible "fixes" if the Court had ruled the other way.

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It's also the second time in three years Roberts has helped pull Obamacare back from the brink of disaster; Thursday's ruling came almost exactly three years after Roberts cast the deciding vote to uphold the health care law's individual mandate.

And this time, it seemed to come a lot easier.

Roberts's decision, joined by Justice Anthony Kennedy as well as the Court's four traditional liberals, is a particularly strong, square win for the administration. Unlike its ruling on the individual mandate, this time the Court didn't reach for a middle ground. There are no signs of a last-minute change of mind. The Court accepted pretty much all of the Obama administration's front-line arguments in defense of Obamacare's subsidies.

"Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter," Roberts wrote.

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The challenge in King v. Burwell centered on a section of the Affordable Care Act that refers to subsidies flowing through "an exchange established by the State." That line means subsidies cannot be made available to people who live in states that relied on the federal government to run their exchanges, the challengers argued.

That's too narrow a reading, and it doesn't square with the context of the statute as a whole, Roberts wrote.

He pointed to many of the same provisions the Justice Department had cited in its briefs. For example, the law directs states to set up exchanges, then says the federal government should step in to set up "such exchange" in the states that don't do it themselves.

"By using the phrase 'such Exchange,' [the law] instructs the Secretary to establish and operate the same Exchange that the State was directed to establish. "¦ In other words, State Exchanges and Federal Exchanges are equivalent—they must meet the same requirements, perform the same functions, and serve the same purposes," Roberts wrote.

If subsidies weren't available in states that did not run their own exchanges, premiums likely would have skyrocketed in those markets—even for people who didn't get their insurance through Obamacare. Roberts's decision explained that outcome at length and agreed with the Justice Department's claim that Congress could not have intended to impose that kind of chaos.

"The statutory scheme compels us to reject petitioners' interpretation because it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very 'death spirals' that Congress designed the Act to avoid," Roberts wrote.

He even cited the dissent from his 2012 ruling on the individual mandate, in which the Court's conservative justices explained that "without the federal subsidies, ... the exchanges would not operate as Congress intended and may not operate at all."

Justice Antonin Scalia, in a scathing dissent joined by Justices Samuel Alito and Clarence Thomas, accused the majority of "interpretive jiggery-pokery." A strict reading of the words "established by the State" should have settled the issue easily, Scalia argued.

But Roberts, again echoing the law's allies, said various intricacies of the law's core structure make that reading too restrictive.

"These provisions suggest that the Act may not always use the phrase 'established by the State'; in its most natural sense," Roberts wrote. "Thus, the meaning of that phrase may not be as clear as it appears when read out of context."

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