TOP STORY ON MIDDAY EDITION, SOME SUPREME COURT WATCHERS ARE CALLING IT ROUND TWO. THE SECOND TIME ATTORNEYS BATTLED BEFORE THE JUSTICES OVER THE AFFORDABLE CARE ACT. YESTERDAY THE COURT HEARD ORAL ARGUMENTS IN A LAWSUIT OVER SUBSIDIES PROVIDED BY THE FEDERAL GOVERNMENT TO HELP PEOPLE PAY FOR MANDATED HEALTHCARE. IT'S THE WAY THE PROVISION -- ABOUT THE SUBSIDIES IS WORDED THAT'S THE BASIS OF THE DISPUTE. AS USUAL, COURT WATCHERS ARE TRYING TO DETERMINE WHICH WAY EACH JUSTICE IS LEANING BY ANALYZING THE QUESTIONS THEY ASK OF THE ATTORNEYS. THEY ARE WILLING ON THIS QUESTION COULD BE DETERMINED WHETHER OBAMA CARE IN ITS PRESENT FORM SURVIVES. JOINING ME ARE GLENN SMITH CONSTITUTIONAL LAW PROFESSOR AT THE CALIFORNIA WESTERN SCHOOL OF LAW, GLENN, WELCOME BACK. THANK YOU. AND SUSAN JANET DIRECTOR OF THE INSTITUTE FOR HEALTH LAW AT THE CALIFORNIA WESTERN SCHOOL OF LAW. SUSAN, WELCOME. THANKS. NICE TO SEE YOU. WHEN THIS CHALLENGE THE AFFORDABLE CARE ACT IS OVER FOR A LITTLE WORDS, WHAT ARE THEY ? THE WORDS ARE ESTABLISHED BY THE STATE. AND WHAT IS THE PROBLEM WITH THEM ACCORDING TO THE PLAINTIFFS ? ACCORDING TO THE PLAINTIFFS, SINCE SUBSIDIES ARE ONLY AVAILABLE TO EXCHANGE QUOTE ESTABLISHED BY THE STATE. THOSE 34 STATES THAT DECLINE TO ESTABLISH THEM AND LET THE FEDERAL GOVERNMENT COME IN AND DO IT FOR THEM, THEY ARE NOT ELIGIBLE FOR SUBSIDIES. SO YOU HAVE PEOPLE CLOSE TO THE MARGIN OF POVERTY OR LOW INCOME WHO NEED SUBSTANTIAL SUBSIDIES TO AFFORD CARE AND THERE IS A RISK THAT THE SUPREME COURT GOES WITH THE CHALLENGERS THAT THE FEDERAL GOVERNMENT WILL NOT BE ABLE TO SUBSIDIZE MILLIONS OF INSURANCE PURCHASERS AND WITH ALL KINDS OF DIRE CONSEQUENCES THAT SUSAN CAN PROBABLY TALK MORE ABOUT BECAUSE THAT IS HER AREA. BUT I THINK IT IS CALLED A DEATH SPIRAL WHERE BECAUSE PEOPLE -- BECAUSE WELL PEOPLE ARE NOT IN THE SYSTEM. ONLY SIX PEOPLE -- SICK PEOPLE AND NUMBERS ARE SMALLER AND YOU GO DOWN AND DOWN. SUSAN, LET'S BACK UP. CAN YOU EXPLAIN HOW GOVERNMENT SUBSIDIES WORK IN A STATE WITH AN EXCHANGE AS OPPOSED TO A STATE WITHOUT AN EXCHANGE ? WELCOME ALL STATES HAVE EXCHANGES. BUT ONLY 17 OF THEM INCLUDING DC HAS A STATE -- AND EXCHANGE ESTABLISHED BY THE STATE. THE REST, THE OTHER 34 HAVE WHAT ARE CALLED FEDERALLY FACILITATED EXCHANGES, THAT IS EXCHANGES ESTABLISHED BY THE FEDERAL GOVERNMENT. IN A STATE THAT DID NOT ESTABLISH THEIR OWN EXCHANGE. WHERE DOES THE MONEY COME FROM FROM ALL OF THE STATES DO THEY HAVE A STATE STATUS EXCHANGE OR FEDERALLY ESTABLISHED A FROM THE FEDERAL GOVERNMENT ALREADY IT'S WAS ALL FEDERAL MONEY WE ARE TALKING ABOUT BUT IT ALL DEPENDS ON HOW IT WAS WORDED IN THE LAW ITSELF. AND JUST TO GO BACK TO WHAT YOU WERE SAYING, GLENN, SO ESTABLISHED BY THE STATE IS THE WORDING IN THE AFFORDABLE CARE ACT ABOUT WHETHER OR NOT PEOPLE SHALL RECEIVE SUBSIDIES. DID ANYBODY MAKE ANY ISSUE ABOUT THIS WHILE THIS LAW WAS BEING DEBATED ? NO. AND THE US GOVERNMENT ARGUES THAT THAT IS BECAUSE CONGRESS AND EVERYONE ALWAYS EXPECTED THAT REGARDLESS OF WHETHER IT WAS A STATE ESTABLISHED EXCHANGE OR FEDERALLY ONE, THE IMPORTANT GOAL WAS TO MAKE SURE EVERYBODY HAD HEALTHCARE AND THAT THE SUBSIDIZATION WORK AND IT WAS AFFORDABLE FOR COMPANIES. THERE WAS NOT ANY REAL GREAT REALIZATION DURING THE TIME IN EFFECT, IRONICALLY, IT TOOK ABOUT ONE YEAR FOR EVERYBODY SEE THE NOTICE LIST AND BRING THIS ISSUE UP. SO IT'S A SITUATION WHERE CONGRESS ARGUABLY HAD A CERTAIN VIEW. THE CONGRESSIONAL BUDGET OFFICE MAY HAVE THOUGHT SUBSIDIES WERE GOING TO BE GENERALLY AVAILABLE WHEN THEY COSTED OUT THE BILL. EVERYBODY ASSUMED IT AND NOW WE ARE ALL GETTING GET CAUGHT UP SHORT WITH FOUR LITTLE WORDS WHICH ON THE FACE OF IT SEEMED TO SAY THAT IS ONLY STATE EXCHANGES. BUT AS WITH MANY STAT -- COMPLEX STATUES, 1000 PAGE. SOMETIMES SEEMS LIKE 100,000 PAGES. 1000 PAGE BILL IT SEEMS NATURAL THAT YOU WOULD HAVE NARROW LANGUAGE AND BROAD LANGUAGE AND YOU HAVE TO FIGURE OUT HOW THE LANGUAGE OPERATES IN THE BROADER CONTEXT AND IT'S JUST A MINEFIELD OF TYPICAL INTERPRETATIONS BUT OF COURSE, AS WITH MANY STATUTORY CONSERVATIVE QUESTIONS, YOU HAD THESE REALLY PUBLIC POLICY AFFECTS. IT REALLY MAKES A DIFFERENCE. IT'S NONSENSE WORDS. CREWS BRING OF THIS CHALLENGE AGAINST THE ACA ? WELL, YOU ALWAYS HAVE TO HAVE A PLAINTIFF WHO IS INJURED. AND IT'S A COUPLE PEOPLE IN VIRGINIA WHO CLAIM THAT IRONICALLY THAT THE GOVERNMENT IS GIVING THEM A GENEROUS SUBSIDY BUT THAT IS MAKING THEM HAVING TO BUY INSURANCE AND PUT MONEY OUT OF THE POCKETS. BECAUSE OF THE GOVERNMENT LARGESS THEY ARE SAYING I HAVE TO PAY SOME MONEY MYSELF. OF COURSE, WHO'S REALLY BEHIND IS -- THIS ARE PEOPLE WHO HAVE BEEN CONSISTENTLY OPPOSED TO OBAMA CARE WHO SUPPORTED THE EFFORT YOU TALK ABOUT THREE YEARS AGO TO TRY TO DECLARE IT UNCONSTITUTIONAL HAVING FAILED THAT. PEOPLE ARE TRYING TO GRASP ABOUT WHETHER -- WHATEVER THEY CAN. AN INTERESTING SIDE NOTE. THIS CASE IS BEING ARGUED BY THE SAME TOURNEYS -- ATTORNEYS WHO ARGUED THE FIRST CASE THAT WENT BEFORE THE SUPREME COURT ON THE AFFORDABLE CARE ACT. THERE WAS SOME HUMOR IN YESTERDAY'S ORAL ARGUMENT ABOUT THAT WHEN ONE OF THE JUSTICES KEPT SAYING BUT YOU ARE MAKING IT OPPOSITE ARGUMENT THAT THE WHEN YOU MAKE THREE YEARS AGO AND JUSTICE ROBERTS SAYS, WELL, YOU LOST THAT 13 YEARS AGO, SO PROBABLY NO ACCIDENT YOU ARE MAKING A DIFFERENT ARGUMENT. BUT THAT'S RIGHT, IT'S VERY REMINISCENT. IT'S A DIFFERENT ISSUE AND IT IS MORE IN THE WEEDS OF STATUTORY INTERPRETATION AND DO WE DEFER TO THE IRS REGULATION OUGHT -- AND ALL THAT. BUT IT IS STILL THE SAME FUNDAMENTAL FIGHT BY PEOPLE WHO -- OPPOSE THE LAW IS SUPPORTED. AND THAT IS MICHAEL CARVIN WHO IS THE ATTORNEY FOR THE PLAINTIFFS AND SOLICITOR GENERAL DONALD VERRILLI WHO IS AGAIN ARGUING FOR THE GOVERNMENT. GLENN, CAN YOU GIVE US A BRIEF SUMMARY OF THE ARGUMENTS MADE BY BOTH SIDES ? NO. [ LAUGHTER ] I TOOK JUST THE SUMMARY OF ARGUMENTS ON WHICH EACH SIDE SUMMARIZES ARGUMENTS INTO PAGES ANIMATED SIDE-BY-SIDE CHART AND IT RAN TO 5 1/2 PAGES. OH, MY. I WILL TRY. OKAY. THERE ARE BOTH ARGUMENT ABOUT THE PLANE MEETING, SATISFY THE STATE VERSUS ACTUALLY THE GOVERNMENT'S GOT A PLANE MEETING ARGUMENT THAT THAT IS A TERM OF ART THAT INCLUDES FEDERAL AND STATE EXCHANGES DID THIS ARGUMENTS BASED ON HOW THAT STATUTE SIX WITH OTHER PROVISIONS IN THE STATUTES. THIS ARGUMENTS ABOUT WHAT WAS CONGRESS'S INTENT. THE GOVERNMENT SAYS CONGRESS WANTED TO PROVIDE SUBSIDIES AND UNIVERSAL PARTICIPATION AND AFFORDABILITY THAT THE PLAINTIFFS SAY I'M A NO, WHAT THE GOVERNMENT WANTED TO DO WAS ONLY GIVES SUBSIDIES IF THE STATES SET UP THE EXCHANGE SO THERE WOULD BE AN INCENTIVE FOR THE STATES TO SET UP THE EXCHANGES. SO EVERYTHING FROM THE DISAGREEMENTS AT THE THEME LEVEL, EACH ACCUSING THE OTHER VIOLATING THE RULE OF LAW AND JUDICIAL ACTIVISM AND THERE'S THE VERY SPECIFIC STATUTORY KIND OF QUESTIONS THAT I LOVE BUT -- THAT HINGE ON THE WORDS. EXACTLY. SUSAN, AS I SAID, EVERYONE LISTENS INTENTLY TO THE QUESTIONS BEING ASKED BY THE JUSTICES TO TRY TO FIND OUT WHICH WAY THE ARGUMENT IS HEADING IN WHICH ARGUMENT IS SUCCEEDING. WHAT QUESTION FROM THE ORAL ARGUMENT CAUGHT YOUR ATTENTION ? WELL, I THINK WHAT'S CAUGHT EVERYBODY'S ATTENTION IS JUSTICE KENNEDY. JUSTICE KENNEDY MADE A POINT THAT ACTUALLY -- I THINK WAS IN ONE OF THE AMICUS BRIEFS AND ACTUALLY HAVE BEEN TALKED ABOUT BEFORE BUT CERTAINLY WAS NOT ONE OF THE THINGS THAT YOU WOULD THINK -- IT WASN'T A QUESTION ABOUT STATUTORY INTERPRETATION. WHAT JUSTICE KENNEDY IS CONCERNED ABOUT IS THAT -- IF THE PLAINTIFF'S INTERPRETATION WINDS, THAT IS THAT THE CONGRESS REALLY JUST INTENDED THE STATES THAT SET UP THEIR OWN EXCHANGES TO GET SUBSIDIES, THEN THIS SETS UP A REAL HIGH PRESSURE KIND OF GUN TO YOUR HEAD CHOICE FOR THE STATES THAT DID NOT SET UP OR ACTUALLY FOR ALL THE STATES, BUT ONLY THE STATES THAT DID NOT SET UP THEIR OWN EXCHANGES ARE GOING TO SUFFER THAT IS THE CHOICE IS EITHER SET UP A STATE EXCHANGE OR LOSE BILLIONS OF FEDERAL DOLLARS IN SUBSIDIES. AND WHAT JUSTICE KENNEDY IS CONCERNED ABOUT IS THE UNCONSTITUTIONALITY OF THAT PRESSURE ON THE STATES THAT IS THE FEDERAL GOVERNMENT CAN CONDITION MONEY THAT THEY ARE GIVING THE STATES FOR EXAMPLE ON THE STATES BEHAVING IN A CERTAIN WAY, AND ONLY UP TO A CERTAIN POINT. SO WHAT JUSTICE KENNEDY IS SAYING IS FINDING THIS AREA IN SUPPORT OF THE GOVERNMENTS ARGUMENT THAT THAT TERMINOLOGY DID NOT MEAN SPECIFICALLY STATE EXCHANGES. IT MEANT STATE WHETHER FEDERAL OR STATE. YES, AND I THINK WHAT JUSTICE KENNEDY IS SAYING IS THAT IF THERE IS A CONSTITUTIONAL PROBLEM, THEN THE COURT IS REALLY REQUIRED TO CHOOSE THE INTERPRETATION BUT DOES NOT HAVE AN ADVERSE CONSTITUTIONAL OF FACT. SO I THINK THAT IS WHERE HE HAS PUT THIS ARGUMENT. THE QUESTION IS, IS THIS A LASTING ARGUMENT. THIS IS A SHOT IN THE DARK WORKS BUT I THINK IT GAVE A LOT OF GOVERNMENT SUPPORTERS ENERGY BECAUSE THEY NEEDED A FIFTH VOTE. THEY HAVE FOURTH VOTES. AND THEY NEED A FIFTH VOTE AND THAT WILL BE JUSTICE KENNEDY OR CHIEF JUSTICE. WHAT QUESTION STRUCK YOU, GLENN ? THAT WAS THE BIG ONE. I WAS ALSO STRUCK BY THE FACT THAT JUSTICES SCALIA AND ALITO WHO MOST OF US ARE COUNTING AS CLEAR VOTES AGAINST THE GOVERNMENT, PARTLY BECAUSE THEY BELIEVE IN A PLANE MEETING, STRICT CONSTRUCTION, ETC. SEEM TO BE GOING OUT OF THEIR WAY TO DEFUSE THE ARGUMENT THAT IF THE COURT RULES AGAINST THE GOVERNMENT, IT WILL HAVE BIG CATASTROPHIC COSTS FOR THE GOVERNMENT. SO JUSTICE ALITO SAID, COULDN'T THE STATE GOVERNORS FIX THIS PROBLEM. IF WE GAVE THEM SOME TIME TO DeLAY. IF WE DeLAY THE RULING AND GAVE THEM SOME TIME. JUSTICE SCALIA SAID COULDN'T CONGRESS FIX IT WHICH OF COURSE LED TO A JOKE ABOUT THIS CONGRESS DOING ANYTHING. BUT THEY OBVIOUSLY REALIZED THAT THEIR SIDE WAS VULNERABLE ON THE REAL-WORLD IMPACT OF THIS AND SO THEY ARE QUESTION -- THEIR QUESTIONS WERE DESIGNED TO DEFUSE THE CONCERNS THAT JUSTICES KENNEDY AND CHIEF JUSTICE ROBERTS WHO ARE THE JUSTICES THAT COULD GO EITHER WAY IN DETERMINING THE MAJORITY HERE WOULD FEEL ABOUT A . WHEN IT COMES TO THOSE REAL-WORLD CAUSES A -- CONSEQUENCES, THIS IS SUSAN YOURS, CAN YOU BRIEFLY ANSWER THIS QUESTION? IT IS IF THE COURT RULES AGAINST THE GOVERNMENT, WHAT KIND OF A POTENTIAL IMPACT COULD IT HAVE ON THE ACA ? WELL, ONE THING THAT WILL ALMOST CERTAINLY HAPPEN IS THAT THE EXCHANGES AND STATES THAT DID NOT ESTABLISH FILLED EXCHANGES, THAT IS THOSE LETTER LOSING FEDERAL SUBSIDIES ARE GOING TO BLOW UP. THEY WILL GET INTO THIS ADVERSE SELECTION DEATH SPIRAL. AND YOU BREAK THAT DOWN FOR A LITTLE BIT? OKAY. ONE OF THE POINTS -- REASONS FOR HAVING SUBSIDIES OBVIOUS HE WAS TO MAKE HEALTH INSURANCE MORE AFFORDABLE. A SECOND REASON TO HAVE SUBSIDIES WAS TO TRY TO ENTICE HEALTHY PEOPLE TO BUY HEALTH INSURANCE RATHER THAN PAY THE PENALTY FOR NOT BUYING HEALTH INSURANCE. BUY HEALTH INSURANCE INSTEAD. AND WHEN THE SUBSIDIES GO AWAY AND INSURANCE INCREASES IN PRICE, WHICH IT DEFINITELY WILL, THEN HEALTHY PEOPLE DROP OUT. HEALTHY PEOPLE -- FIRST OF ALL, FOR HEALTHY PEOPLE -- FOR MANY HEALTHY PEOPLE INSURANCE WILL BECOME UNAFFORDABLE DEFINITIONALLY UNDER THE AFFORDABLE CARE ACT. AND THEY WILL NOT BE SUBJECT TO THE PENALTY. SO THEY WILL NOT HAVE A REASON TO BE BUYING HEALTH INSURANCE. AS HEALTHY PEOPLE DROP OUT, THE INSURANCE RISK WILL GET SICKER AND SICKER BECAUSE 60 THAT SICK PEOPLE WILL FIND -- BY HEALTH INSURANCE BECAUSE THEY KNOW THEY NEED HEALTHCARE. HEALTH INSURANCE PREMIUMS KEEP GOING UP AND UP AND UP UNTIL IT BECOMES TOTALLY UNAFFORDABLE AND THE WHOLE EXCHANGE WILL FAIL OR THERE ARE OTHER CONSEQUENCES THAT COULD HAPPEN INSURANCE COMPANIES COULD JUST PULL OUT, BECAUSE IT IS JUST NOT PROFITABLE FOR THEM TO BE IN THIS. THERE ARE ALL KINDS OF CONSEQUENCES BUT MOSTLY THESE EXCHANGES ARE GOING TO BLOW UP AND WHAT WILL HAPPEN WHEN THE EXCHANGE GOES UP IF THEY -- THERE WILL BE A LOT OF UNINSURED INDIVIDUALS IN THE STATES. I KNOW PEOPLE THAT ARE LISTENING ARE CONCERNED OR CURIOUS AT LEAST TO WHAT KIND OF STATE CALIFORNIA MIGHT HAVE IN THIS. WE HAVE A STATE RUN EXCHANGE HERE. WE ARE ONE OF THE HANDFUL -- MORE THAN A HANDFUL BUT WHAT DID YOU SAY, 36 ? 17 STATES. 70 STATES THAT HAVE STATE RUN EXCHANGES WHAT CONSEQUENCES OF ANY WOULD WE FEEL ? I'M NOT AWARE OF ANY. WE WILL SEE THE SUBSIDIES WILL KEEP COMING. HEALTHY PEOPLE PRESUMABLY WILL KEEP BUYING HEALTH INSURANCE BECAUSE IT'S GETTING SO THAT THE PENALTIES AS LONG AS EXPENSIVE AS THE SUBSIDIZED INSURANCE SO YOU MIGHT AS WELL GET SOMETHING FOR YOUR MONEY. SO I DON'T THINK YOU REALLY HAVE CONSEQUENCES IN A STATE. EXCEPT ARE WE PART OF A BROADER HEALTHCARE MARKET AND SYSTEM WHERE PRESUMABLY IT IS LIKE WE ARE NOT DIRECTLY AFFECTED BY THE SORES ON THE EAST COAST, BUT WE ARE IN TERMS OF -- IMPACT ON THE BUDGET AND ALL OF THAT OR NOT ? WELL, I DON'T THINK SO. CALIFORNIA HAS ITS OWN INSURANCE POOL, RISK POOL AND SO IT'S RISK POOL IS NOT GOING TO BE AFFECTED BY THIS BECAUSE WE ARE GOING TO CONTINUE TO GET SUBSIDIES. CERTAINLY, WHAT IS GOING TO HAPPEN IS CALIFORNIA CITIZENS WILL BE HEALTHIER THAN CITIZENS IN OTHER STATES. I THINK -- UNLESS YOU MOVE. AND THAT COULD BE A CONSEQUENCE. PEOPLE TRY TO COME TO STATES THAT HAVE STATE EXCHANGES IN ORDER TO BE ABLE TO HAVE INSURANCE. IT'S NOT SO LONG AGO THAT WE WERE IN A POSITION WHERE LOTS OF PEOPLE WERE UNINSURED. AND IT'S ONLY BEEN THE LAST SHORT PERIOD OF TIME THAT THE AFFORDABLE CARE ACT REALLY HAS DEMONSTRATED THAT IT CAN WORK. 11 1/2 MILLION PEOPLE SIGNED UP FOR HEALTH INSURANCE IN ALL OF THE EXCHANGES IN THE UNITED STATES. AND SO THAT WE HAVE SO MANY FEWER UNINSURED THAN WE HAD REAVIS OR PRIOR TO THE AFFORDABLE CARE ACT. WE TALK ABOUT THAT INTERESTING QUESTION THAT WAS POSED BY JUSTICE KENNEDY WHICH SEEMED TO INDICATE THAT HE WAS -- HE WAS DEALING WITH AN ARGUMENT THAT MIGHT SIDE TOWARDS THE GOVERNMENT CASE. WE HAD A CURIOUSLY SILENT JUSTICE ROBERTS WHO MAY INDEED BE ALSO WAS CONSIDERED A SWING VOTE ON THIS. HERE'S THE QUESTION, GLENN. I KNEW IT WAS COMING. HOW DO YOU THINK THE COURT MIGHT BE LEANING ON THIS ? WELL, IT'S ALWAYS DANGEROUS TO PREDICT WHAT -- THE ORAL ARGUMENT ESPECIALLY AS YOU SAY THREE YEARS AGO WE HAD JUSTICE ROBERTS FLIRTING AND THE QUESTIONS HE ASKED WITH WHAT HE ULTIMATELY WENT WITH WAS THE ATTACK THEORY THAT INDIVIDUAL MANDATE WAS ATTACKED. WHAT WE'RE SEEING IS SUSAN SAID, A DAY LATER PEOPLE GOING IN -- BEING AFRAID, VERY AFRAID ABOUT THE GOVERNMENT LOSING. AND LOOK SOMEWHAT BETTER -- LOOKS SOMEWHAT BETTER. AND JUSTICE KENNEDY IN OTHER AREAS HAS BEEN KNOWN TO FIX ON AN IDEA THAT ONLY RESONATES WITH HIM BUT ENOUGH TO GET HIM TO BE A FIFTH VOTE. TODAY I WAS PREDICTING 55% GOVERNMENT WHEN BEFORE AND NOW I MAY BE MOVING IT UP TO 60 OR 65. IT'S BY NO MEANS OBVIOUS AND I HAVE BEEN AT THIS GAME LONG ENOUGH WITH PREDICTING THE SUPREME COURT TO KNOW ESPECIALLY FROM ORAL ARGUMENT IS VERY DIFFICULT. I THINK THAT AS THE CONSEQUENCES OF THIS -- DO THEY REALLY WANT TO BE KNOWN -- DOES JUSTICE ROBERTS WANT TO BE KNOWN THE HEAD OF THE COURT THAT DENIED THE USE OF PEOPLE HEALTHCARE. DOES JUSTICE KENNEDY WANT TO GO WITH A CORSET AFFECT ON STATES? COOLER HEADS WILL ULTIMATELY PREVAIL. BUT I WOULD NOT BET A LOT OF MONEY ON A . I WANT TO THANK YOU BOTH. WE WILL CHECK IN AT THE END OF YOUR. THAT'S WHEN THIS DECISION COMES OUT. I'VE BEEN SPEAKING WITH GLENN SMITH, CONSTITUTIONAL LAW PROFESSOR AND JUTE SUSAN DIRECTOR OF -- THINK YOU BOTH VERY MUCH. THANK YOU.
WASHINGTON (AP) — The Supreme Court argument over subsidies that help millions of people afford their health insurance suggests that the Obama administration has two chances to attract one critical vote.
The justices will gather in private Friday to cast their votes in the case. The outcome after Wednesday's argument appears to be in the hands of two conservative justices — one who voted with the court's four liberals to uphold the law in 2012 and the other who joins the liberals more often, but who would have killed the whole thing three years ago.
If Justice Anthony Kennedy had his way in 2012, there would be no health care case because there would be no Affordable Care Act. Kennedy, whose vote often is decisive in cases that divide the court's liberals and conservatives, was one of four dissenters who would have struck down the entire law.
But on Wednesday, Kennedy at least left open the possibility that he would not vote the same way again because of a legal concept known as constitutional avoidance. The idea is that judges should avoid interpreting a law in a way that raises constitutional problems if there's any other reasonable way to view it.
The dispute focuses on four words in the massive health law, "established by the state," which the challengers say is clear evidence that Congress intended subsidies to go only to people in states that created their own health insurance marketplaces, or exchanges. The idea was to have a carrot-and-stick approach, the challengers' lawyer, Michael Carvin, said. Congress wanted states to establish their own exchanges and held out generous subsidies to the residents of those that did.
But Kennedy said such a scheme would raise a serious constitutional question about whether the federal government was trying to coerce the states to act.
Kennedy told Carvin 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."
He repeated his concern when Solicitor General Donald Verrilli Jr. defended the administration's view that subsidies are available everywhere because Congress did not want a law designed to reduce the number of uninsured Americans to leave people unable to afford insurance based on where they live.
If Carvin is right, "this is just not a rational choice for the states to make and ... they're being coerced," Kennedy said. "And that you then have to invoke the standard of constitutional avoidance."
Verrilli agreed with Kennedy that he was raising yet another reason for the court to adopt the administration's view.
Not everything the justice said, though, cut in the administration's favor. He told Carvin there may be no other reasonable way to read the provision at issue. "It may well be that you're correct as to these words, and there's nothing we can do. I understand that," Kennedy said. He also did not sound persuaded by Verrilli's portrayal of the law to allow subsidies nationwide.
Kennedy's comments could give both sides reason to hope. Chief Justice John Roberts said so little that Carvin told reporters after the argument, "It would be a fool's errand to infer anything from silence."
Roberts disappointed Carvin and other conservatives when he cast the decisive vote in favor of the health care law in 2012.
The chief justice never has trouble getting a question in during arguments, so his quiet approach Wednesday could only have been deliberate.
Each side in the case argues that the law unambiguously supports only its position. However, one other option for the court would be to declare that the law is ambiguous when it comes to subsidies, and therefore defer to the Internal Revenue Service's regulations making tax credits available nationwide.
Verrilli advanced this point as his backup argument, provoking one of Roberts' few comments. If the court finds that the law is ambiguous and bows to the current administration's take on the law, Roberts said, "that would indicate that a subsequent administration could change that interpretation."
It will be late June before it is clear whether the remark was a signal to either side.
The case is King v. Burwell, 14-114.
