Obamacare's fate hangs in the balance at Supreme Court

WASHINGTON - The fate of Obamacare hung in the balance Wednesday as the Supreme Court heard arguments on whether the Affordable Care Act could continue offering subsidies to help people buy insurance in states such as Pennsylvania and New Jersey.

The 80-minute session - 20 minutes longer than expected - was often a strident affair, with justices grilling lawyers in ways that reflected their liberal and conservative bents.

Chief Justice John G. Roberts Jr., who was notably silent through most of the questioning, could cast the deciding vote. A decision is expected in late June.

This marked the third trip to the high court for the health law, in what Justice Elena Kagan called "a never-ending saga."

It narrowly survived the first on a 5-4 vote, which upheld the mandate that individuals must buy insurance or pay a penalty. And it lost on the second, although that was on a peripheral aspect involving mandated coverage for contraceptives.

A loss in King v. Burwell could inflict serious damage. The challengers want to deny tax subsidies to insurance buyers in 34 states that use the federal exchange, Healthcare.gov, to sell individual policies.

To buttress their case, they cite four words in the law noting that subsidies are available only where the exchanges have been "established by the state."

Ending subsidies on the federal exchange would make coverage unaffordable for most buyers. More than seven million people could lose insurance, leading to what experts call a "death spiral" of higher costs for the insurance markets in those states.

In Pennsylvania, 471,930 residents have enrolled through Healthcare.gov, and 252,792 have enrolled in New Jersey.

Both states have expanded Medicaid, the program for the poor, which would not be affected.

The court's four liberals wasted no time in pressing the challengers' counsel, Michael Carvin.

Justice Ruth Bader Ginsburg stopped him after his first sentence, asking that he explain whether the plaintiffs have suffered an actual injury that would qualify them to bring the case. The answer: At least two plaintiffs say their injury was to have to buy insurance they don't want or pay a penalty.

Justice Stephen G. Breyer jumped in soon after to challenge Carvin's central assertion that the law limits subsidies to buyers on exchanges "established by a state."

Breyer pointed to other provisions in the law that use the phrase "by the state" to refer to all exchanges, both federal and state.

Kagan followed Breyer by likening the Healthcare.gov exchange to a memo written by one law clerk in place of another. "In other words, there's a substitute," she said, just as there is when the federal government operates an exchange for a state.

Justice Sonia Sotomayor challenged Carvin's assertion that the law omitted subsidies from the federal exchange to induce states to create their own. "Tell me how that is not coercive in an unconstitutional way," she asked. Carvin replied that the subsidy provision is not coercive because it is a mere funding condition.

From the other side, Justice Samuel A. Alito Jr. was just as combative. He repeatedly countered points the liberals raised in questioning Carvin.

He asked Solicitor General Donald Verrilli, the administration's lawyer, why the law specifically refers to subsidies on state-established exchanges when it could have been worded differently.

Justice Antonin Scalia echoed Alito's intensity. He questioned Verrilli on how the federal government can establish something called a "state" exchange. "That is gobbledygook," he declared.

Justice Anthony M. Kennedy, another potential swing vote, was harder to read.

On one hand, he challenged Verrilli's assertion that the court should defer to the IRS and permit subsidies on the federal exchange.

But he also saw a "serious constitutional problem" if the court accepted Carvin's view that withholding subsidies was meant as a tool to prod states to build their own exchanges.

Roberts' questions gave away little about his intentions. His was the controversial deciding vote in the first case.

The stakes now are extraordinarily high. "Should the plaintiffs prevail, the loss of access to affordable coverage by millions translates into nearly 10,000 preventable deaths annually," said Sara Rosenbaum, a professor at George Washington University and an expert on indigent care.

Wharton School health economist Mark Pauly predicted that if the court ruled for the challengers, "many of those who got subsidies would drop out, which will put us back where we were before ACA," when millions more had no health insurance.

Alito suggested that a ruling against the subsidies could be delayed until the end of year to avoid chaos.

But unless Congress were to intervene, individual insurance markets in the states like Pennsylvania, New Jersey, and Delaware would likely collapse after that.

A group of Republican senators has offered to consider a temporary extension of subsidies on the federal exchange, if the court rules for the challengers, but they have yet to provide details. They might come with strings that Democrats are unwilling to accept.

471,930

Pennsylvanians enrolled through the federal health exchange.

252,792

New Jersey residents enrolled through the federal health exchange.EndText