THE BLOG
12/05/2014 11:09 am ET Updated Feb 04, 2015

The Most Important Supreme Court Case This Term

Whenever I cover a case in the Supreme Court, I play the mental game, "What would I do if I were the lawyer? And the lawyer on each side?" [OK, I confess ... I do miss litigating cases ...]

Right now there is an incredibly important case before the US Supreme Court called King v. Burwell.

If the defendant (HHS Secretary Burwell) loses, Obamacare will be in deep, deep, deep trouble. How deep? I don't know how Obamacare will survive since a decision for King would strip much of the funding/subsidies in the Obamacare law. Without the funding and subsidies, and with both Democrats and Republicans seeking to get rid of the medical device tax which is a significant source of revenue to the healthcare law, Obamacare essentially goes belly up. People can't afford it and there is no revenue to finance it.

So what's the issue? Whether subsidies and tax credits can go to those in states that did not set up exchanges -- and instead the federal government stepped in and set up the exchanges. How many states did NOT set up their exchanges? 36.

The plaintiff (King) says the express language in the Obamacare statute says that the subsidies/tax credits were put in to the statute for a specific purpose -- to lure states into creating their own exchanges. And if the states did not set up their own exchanges? No subsidies/tax credits for them. The plaintiff says the clear language limiting to states that set up their exchanges was not an accident nor an oversight but deliberate.

The Obama administration essentially says the language was in-artfully drafted, an accident, that the subsidies/tax credits were meant for every state, regardless who set up the exchange. It says that the Supreme Court should not just read the language limiting the money to states that created their own exchanges, but to put the issue in a broader context to include the intent of Obamacare, which was healthcare for everyone. If the statute is read more broadly by the Supreme Court, the Obama administration has a bigger chance of winning.

It boils down to this ... if the Supreme Court goes beyond the words, what WAS the broader intent?

So ... what would I do? If I were King's lawyer, and with the chance the Court could take a broader view than the strict words, I would want the Supreme Court to consider the statements of Jonathan Gruber, the architect of Obamacare. Gruber states that the intent of the subsidies (the plaintiffs view) was ONLY for states who created their own exchanges and not for states where the exchanges were created by the federal government.

Here's what Gruber is quoted as having said:

"What's important to remember politically about this is if you're a state and you don't set up an exchange, that means your citizens don't get their tax credits -- but your citizens still pay the taxes that support this bill," he said. "I hope that that's a blatant enough political reality that states will get their act together." [January 2012/Noblis] [click here]

The foregoing is powerful language (proof) about the intent - eliminating states that did not set up the exchange was not just a mistake but deliberate. You would think that a home run for plaintiff King but not so fast. There is a problem for the plaintiff and a significant one. Gruber's statements are beyond the record -- they are not in any of the record that the Supreme Court will be reviewing when it makes its decision. Because it is 'beyond the record' it is irrelevant to the Court's decision. It would be improper for the Court to go beyond the record in reaching its decision. Why isn't the Gruber language in the record and powerfully argued? It did not circulate after the record was closed.

So..what would I do? I would either file a motion to supplement the record in the Supreme Court or I would ask that the case be remanded to the lower court where I would make that same motion. Courts don't like records being supplemented but I would say this is a unique situation.

And if I were the lawyer for the Obama Administration? I would say 'too late!' All the Gruber comments were in the public domain at the time the record was open...even on YouTube and that the King lawyers blew any chance to supplement the record. "You snooze, you loose."

So what is going to happen? And how will the Supreme Court decided this case? Your guess is as good as mine...but this sure is an important case!

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click here for a good article with more background