Kennedy Doesn’t Swing That Way: Predicting the Outcome in King v. Burwell

In early March, the Supreme Court heard oral arguments in King v. Burwell, to decide whether, under the Affordable Care Act (ACA), subsidies may be provided to individuals on health care exchanges which were set up by the federal government for the states which opted not to do so. This highly watched case revolves around four words in Section 1321 of the ACA, which states that subsidies may be provided to individuals on an “Exchange established by the State...” The challengers claim this means that subsidies are available only on exchanges established directly by a state and not on exchanges created by the federal government for a state. The government argues that looking at the law as a whole, an “Exchange established by the State” includes those established for a state by the federal government.

This post isn’t intended to rehash the arguments of the case. As no one can plausibly deny, this case is simply another partisan and ideological ploy to unravel the Affordable Care Act, yet another episode in a “never-ending saga,” to use Justice Kagan’s words. The question now is how will the Court rule? Based on oral arguments and general consensus, Justices Ginsburg, Breyer, Sotomayor, and Kagan will side with the government and Justices Scalia, Thomas, and Alito will side with the challengers. Observers agree that the votes of Chief Justice Roberts and Justice Kennedy will decide the fate of the law. Following oral arguments, much of the commentary (that I read) guessed that at least one, if not both, were more likely than not to side with the government. Roberts said very little during oral arguments; Kennedy said quite a bit. Just as the words “established by a State” need to be viewed in context, so do Kennedy’s and Roberts’ potential votes.

Justice Kennedy expressed concerns about federalism during oral arguments, leading many to speculate he may well side with the government. Specifically, he indicated that the challengers’ interpretation of the statue would be unconstitutionally coercive to the states that didn’t set up their own exchanges. To quote Justice Kennedy:

Let me say that from the standpoint of the dynamics of Federalism, it does seem to me that there is something very powerful to the point that if your argument is accepted, the States are being told either create your own Exchange, or we'll send your insurance market into a death spiral. We'll have people pay mandated taxes which will not get any credit on -- on the subsidies. The cost of insurance will be sky high, but this is not coercion. It seems to me that under your argument, perhaps you will prevail in the plain words of the statute, there's a serious constitutional problem if we adopt your argument.

It is possible that Kennedy will side with the government on these grounds. But I don’t buy it.

Those who followed oral argument in the 2012 ACA cases will recall that following OA, it was generally expected that the fate of the ACA would come down to Kennedy. He asked questions critical of both sides in that case, and while Solicitor General Donald Verrilli was widely panned for his lackluster performance before the Court in that case, some believed Kennedy might still vote with the liberals to uphold some or all of the law. Chief Justice John Roberts also asked questions critical of each side in those cases, and there was some speculation that he might join Kennedy if he were to vote to uphold the law, so that the outcome would be a less divided 6-3 decision, rather than 5-4. Further, the Court had several possibilities before it: uphold the law in its entirety, strike down the mandate but uphold the remainder of the law, or strike down the entire law. There was also the somewhat separate issue of the Medicaid expansion, which the Court could have upheld as written, struck down in part, or struck down entirely.

Justice Kennedy, the hope of so many liberals, voted with three other conservative justices to strike down the Affordable Care Act in its entirety: the mandate, the Medicaid expansion, everything. On Chief Justice Roberts’ compromise position for the Medicaid expansion—to rule it coercive to essentially force states to expand Medicaid, but allowing them to opt in to the expansion—Justice Kennedy disagreed, writing with Justices Scalia, Thomas, and Alito that because the Medicaid expansion was coercive as written, “the most natural remedy” was to strike it down entirely. In the 2012 case, with a number of options available to him, Kennedy took the most conservative position possible.

One could say, “But this is a different case. Kennedy could have accepted the outcome of that case and approach this one on its own terms.” Perhaps, but just last year, during oral argument in the Hobby Lobby case, Kennedy indicated that he wants to revisit the constitutionality of the ACA.

JUSTICE KENNEDY: Is it your position that part of the compelling interest here is that you have to protect the integrity -- the operational integrity of the whole Act?

GENERAL VERRILLI:  It is part of our argument, absolutely. And—but it—but there is in addition to that, much more--

JUSTICE KENNEDY:  Does that mean the constitutionality of the whole Act has to be examined before we accept your view?

GENERAL VERRILLI:  Well, I think it has been examined, Your Honor, is my recollection.

(Laughter.)

That exchange is important to bear in mind, I think, when considering that at least four justices voted to grant cert in King, at a time when there was virtually no reason for the Court to grant cert. Linda Greenhouse wrote a passionate article in the New York Times last November expressing her dismay about the Court’s decision to grant cert. Of course, she falls on the liberal/progressive end of the spectrum, but her article nevertheless indicates the reasons the justices had to not take the case when they did.

Since there’s no reason to believe the liberal justices would have voted to grant cert, let’s try to get to four. It’s safe to assume that Justices Scalia, Thomas, and Alito were among those four. Therefore, either Roberts or Kennedy, or both, voted to grant cert. Chief Justice Roberts’ went to great pains to make the Court not appear as another blatantly political branch of government in the first health care case. Why would he change that approach now, in yet another health care case?

As demonstrated in the exchange from OA in Hobby Lobby quoted above, Justice Kennedy suggested just last year that he wants to reexamine the Act’s constitutionality. King could provide that chance. Interestingly, this case has been discussed as being a statutory case, not a constitutional case, because it deals only with statutory construction. Yet in oral arguments, Justice Kennedy was trying to turn it into a constitutional case, so he evidently is still transfixed by the constitutionality of the Affordable Care Act.

It’s true that someone listening to oral arguments with no background information in mind might reasonably interpret Justice Kennedy’s remarks to mean that he will decide in favor of the government. But considering his vote in the 2012 ACA case, and in particular his vote to strike down the entire Medicaid expansion as unconstitutionally coercive, along with his remarks during the Hobby Lobby oral arguments, I think he will use King as another attempt to strike down as much of the law as he can on constitutional grounds.

Ruth is always watching you, Tony

Ultimately, though, I think the Chief Justice will vote with the four more liberal justices to uphold the administration’s interpretation of the law. Based on his only substantive remark from oral arguments in King, I think Roberts will vote to uphold the government’s interpretation under the doctrine of administrative deference, and then basically quote himself from three years ago saying “the Court does not express any opinion on the wisdom of the [administration’s interpretation]. Under the Constitution, that judgment is reserved to the people.” Then maybe he’ll throw in something else begging the other conservatives not to grant cert to every health care case that comes along, under the doctrine of not being petty jerks.