Making heads and tails (and “death spirals”) of the healthcare case, King v. Burwell

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Do you live in a state with its own exchange?

Cara L. Gallagher, Weekend Contributor

How many articles, journals, blog posts, podcasts, and Tweets does it take to understand King v. Burwell? The short answer: Several. One can easily find himself in their own “death spiral” of content, to use the parlance of the media and Justices recently, and still end up in the same place – confused, but maybe hungry for more.

I was hungry for more and followed the analyses closely, but even I got a bit lost in the weeds of the case. It’s been over a week since oral arguments were delivered in King v. Burwell, which took a second stab at the Affordable Care Act in the Supreme Court. By Thursday of last week, at least five friends and students asked me “What the heck is this case really about?” I forwarded links to articles and podcasts that delivered simple, straightforward explanations, and recommended writers to follow on Twitter. But I know some of those well-intentioned folks will never open that link, listen to the podcast, or even open the email. What to do?…

I used to write a segment called “5-cent and 10-cent rundowns” where I dissected critical Supreme Court cases into digestible, short write-ups that one could read to accomplish two goals: 1) gain an understanding of the case; 2) be able to explain the case to someone else if/when the subject came up. These rundowns are for the curious, the hardcore, or those who just want to bookmark this page to come back to in June, when a decision is likely to come down and there is a revival in interest for this case.

5-cent rundown: Can the federal government, via the Internal Revenue Service, give people assistance (tax credits) to purchase insurance through the Federal “exchange” even though the original language in the 2010 Affordable Care Act said the credits are only for those purchasing insurance on exchanges “established by the state”? This case centers on whether or not the Justices will read the law literally or take a broad interpretation of the ACA. These two dubious ways of interpreting the ACA are in essence what divides the Court. Textualists, like Scalia and Alito, are likely to follow the literal letter of the law, whereas Breyer, Sotomayor, and Ginsburg will interpret the letters, the sentence, and the broader context. Either way, this case is certain to be of consequence to the 11 million people getting their insurance through Obamacare.

10-cent rundown: If you’re a living, breathing citizen of the U.S. you have to have healthcare. That fact was established in the controversial 2010 ACA legislation. A separate, major SCOTUS case ruled this was law was constitutional. King isn’t going to impact folks who are fortunate enough to get healthcare through their employer. The core audience in this case are the 30+ million Americans who had no health insurance before Obamacare: Grad students, nannies, consultants, small-business owners, and millions of others.

Since health insurance was mandated, the ACA was written so that everyone would be able to go and get their own insurance in an open market called an “exchange.” The states could set up these exchanges or they could opt out. If your state said “Pass,” you could still go to the federal exchange and pick a provider at a price you could afford. Unless you live in one of the 16 states with its own exchange, you’re forced to get your insurance on the federal exchange. Since the federal government isn’t in the business of handing out cash, the Obama administration has the IRS provide the financial help in the form of tax credits to ease the financial burden of paying for insurance.

Dave King, a 64-year old man, and three other people from Virginia, represent the petitioners in this case. Virginia is one of the 34 states that doesn’t offer an exchange forcing residents into the federal exchange. Burwell is Sylvia Mathews Burwell, the Secretary of the Health and Human Services Department. Solicitor General Donald Verrilli is the attorney representing the government.

If you’re shocked an average-Joe like Mr. King took his case all the way to the Supreme Court, don’t be. Wealthy interest groups, think tanks, and public policy institutes scout petitioners for cases like this that, they think, are prime Supreme Court bait. In King’s case, the Competitive Enterprise Institute is supporting him and his legal team. Michael Carvin is King’s attorney and a Supreme Court advocate who argued the last Affordable Care Act case before the justices in 2012. King and the CEI want to convince four Justices, and either Kennedy or Chief Justice John Roberts, that the IRS and the Obama administration are violating the law by giving Americans in the 34 states without exchanges tax benefits therein dealing a fatal blow to spirit of the ACA.

The government’s argument asserts that King is isolating the words “established by the state” and taking them out of context. Further, it would be counterintuitive to create a piece of major legislation with four words that can internally dismantle the law. The Justices were reminded that many people can only afford to pay for mandatory insurance through the tax credits they get from the IRS. If the 11 million who’ve registered for Obamacare stop paying for their insurance because they no longer have financial support, the infrastructure of the ACA is crippled. As the ACA relies on a system in which millions of healthy people pay to offset the costs for those that are not, such a cataclysm would result in the interminable death spin for Obamacare.

I received a great question this week: “Who asked questions in the Court? The Justices tend to save their words for challenging hypothetical tests to the attorney or side they’re most troubled by. Silence can be golden. If they’re not asking questions they’re likely, but not always, leaning towards the attorney speaking. [The only exception being the consistently silent Clarence Thomas.] The usual left-leaning justices (Kagan and Sotomayor) challenged King’s attorney while Scalia and Alito had several questions for Solicitor General, Donald Verrilli. [The Wall Street Journal had a simple, easy to read play-by-play here.]

The legal equivalent to Muhammad Ali and Joe Frazier met, again, in the SCOTUS during oral arguments for King. Michael Carvin, a seasoned Supreme Court advocate who represented the petitioners, challenged the constitutionality of the ACA in 2012 and the Florida recount in 2000, versus Donald Verrilli. Verrilli’s mild-mannered, methodical approach, juxtaposed with Carvin’s brazen defense of statutory text, make listening to the audio of the oral arguments worth it.

What’s next? A decision. Many say the justices already know how they’re going to rule by the time oral arguments happen but crafting the text of the decision – especially in close (5-4) cases – takes time. A decision is expected at the end of June, just before the end of the Supreme Court’s term.

The views expressed in this posting are the author’s alone and not those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays or art are solely their decision and responsibility.

112 thoughts on “Making heads and tails (and “death spirals”) of the healthcare case, King v. Burwell”

  1. Mespo said…

    I have noticed that as the % of attorneys in the legislature grows the likelihood of compromise increases as well since that’s what we do.

    Surely you jest in our Congress of today. Compromise (sausage making) is as rare as unicorns today. It is no longer 1965 anymore. Are these Congressional lawyers immune to the concept?

    PS…I might joke about “lawyers” but I really do like them….they’ve saved my behind several times….most recently with my dual with US Bank and the idiotic bean counters of my old Army outfit. It wasn’t compromise, however, it was outright insistence that the law be followed as written…fortunately for me it was NOT vague. The “compromise” was the other side finally admitting their illegal error and shutting up and carrying out their legal obligations. Now and then the KISS principle works.

  2. Mespo said …

    Compound that with the deference courts always extend to implementing federal agencies …

    My experience in federal agency tells me that “deference” is uncalled for and detrimental. The word of Congress, in common parlance, is what should matter. If vague, the decision should send the entire law back for revision by Congress. By deferring to vague context and subsequent rule making by bureaucrats the court oversteps its bounds…just my opinion. When one asserts that there just might be a pig with wings that flies, show me one and I’ll listen…otherwise I want a redefinition, by Congress, and revision of the vagary. Where does this body of lawyers get off by re-defining what a “state” is in the overall context of a nation of “United States?”

    Yes, I admit I am stubborn…and simple minded, which at times just makes life easier.

  3. nick:

    “Has anyone noticed w/ the higher and higher % of politicians being attorneys, the more the courts become important and the less common sense prevails.”

    That started in 1803 with Madison v. Marbury.

    I have noticed that as the % of attorneys in the legislature grows the likelihood of compromise increases as well since that’s what we do. I’ve also noticed that as the % of non-attorneys grows (like that bug killing Tom Delay or bomb throwing teacher Newt Gingrich) the amount of vitriol increases and the amount of work decreases.

  4. It’s a silly article davidm. What you call morality, I call ethics and we can both agree that some actions are undoubtedly unethical in our society. Cheating on your homework or gratuitous violence, for example. Where we diverge is your insistence that morality is an objective versus a subjective response to a given situation by a society and derives from some external source. In the Europe of the 1500’s it was quite “moral” to burn folks at the stake for heresy. We’d call them “immoral” today. In 1900s it was immoral to sit unchaperoned in a young lady’s parlor. Today, that’s considered quaint. The truth is that societies determine “morality” and enforce its terms. To resort to some deity-based morality only empowers the human interpreter of those moral laws. It’s “will to power” all over again in priest’s vestments and that’s what I object to.

    1. mespo wrote: “Where we diverge is your insistence that morality is an objective versus a subjective response to a given situation… In the Europe of the 1500’s it was quite “moral” to burn folks at the stake for heresy. We’d call them “immoral” today. In 1900s it was immoral to sit unchaperoned in a young lady’s parlor. Today, that’s considered quaint.”

      I have no insistence that morality be an objective response. For the most part, morality is understood subjectively through rational thought.

      From my perspective, you confuse the terms “objective” with “absolute standard” or “fact.” I consider that morality has an absolute standard or factual basis, similar to Plato’s concept, but our understanding of it is based in subjective analysis. Morality for the most part is not subject to the scientific method of empirical analysis. So the word objective is not appropriate.

      What I hear you saying is that if we can cherry pick a few extreme examples held by a minority of the population where their moral judgments were in error, then it follows that no moral absolutes exist. Sorry, but that is a non-sequitur. The observation that some make mistakes in comprehending facts and moral absolutes does not mean that these standards do not exist. It means that we have to work harder at discerning them and articulating them in a way that others can understand.

      The importance of recognizing moral absolutes is that it leads to a spirit of cooperation between those who have different perceptions of that truth. It leads to teamwork to understand together what is true.

      In contrast, the idea that everybody each has their own truth is fallacious. The philosophy that whatever is true for one person may not be true for someone else is dangerous. The only path to peace in this mindset is one where each person must ignore others or simply tolerate them. That peace is typically short-lived. With no common understanding or path to achieve it, this philosophy leads to chaos, disunity, fighting and wars.

  5. Has anyone noticed w/ the higher and higher % of politicians being attorneys, the more the courts become important and the less common sense prevails.

  6. Ari:

    The opinion goes to great lengths to concede the so-called common sense approach you advocate but distinguishes the situation where the meaning is not so plain in the context of the entire act which clearly contemplates national exchanges when states fail to act. Compound that with the deference courts always extend to implementing federal agencies and you arrive at Judge Gregory’s decision.

  7. There are certain specific situations where medical care can help, but overall, people just assume that doctors know best. The truth is that doctors can’t heal. Bodies heal themselves.

    On this I must agree. Specific situations where medical care can help. Broken arm, appendicitis, really really bad cuts and gashes.

    I rarely go to the doctor, even when I am sick with something minor because I know it will get better (generally) if I wait long enough and I can treat it myself….or if it doesn’t THEN I might go to the doctor as a last resort. The doctors want to over prescribe medicines, which are poisonous and not natural substances. Layering conflicting medications on top of each other or which cause worse side effects than the original problem. Taking medicines and antibiotics that are not needed just compound the problem. MRSA and other antibiotic resistant bacteria are the result.

    If more people just waited and healed naturally instead of going to the doctor and using their insurance for every sniffle and scrape …or paid CASH instead the cost of medical care in total would not be as expensive.

    One of my doctor clients stated that the biggest expense he had in his practice was hiring people to deal with the insurance processing so then he had to charge more for everything else to counter the extra paperwork costs.

    I mostly paid cash for those very few times that I went to the doctor and got a BIG discount and actually paid less than my co pay would have been if I had used a premium health insurance plan.


  8. rafflaw said…

    Aridog, …. I gave you the direction to check dictionaries as a start so that you would not be getting my definition. The various definitions of state use it interchangeably between a national state and a more local geographic institution, ie, the state of Illinois. That was what I wanted you to see from neutral sources other than my understanding of it. No disrespect was intended.

    I can accept your explanation of your intentions, so thanks….even if it was unintentionally condescending. However, Mespo 727272 gave a far better response. And I thank him for that, even if we never agree on anything much long term. I outlined why I had difficulty with that “context” argument from a judicial point of view. The “each state” context seems rather simple to grasp.

    We make things too hard more often than not…it is a national disease. (Think Clinton’s’ quibble of what the definition of what “is” is.) In the USA, I assert the word “state” means individual “states.” No court should re-interpret that as anything else. I suspect they will…and make Profs Hayakawa and Johnson spin in their graves….just like the penalty vs tax delusion rendered by CJ-SCOTUS Roberts. Sometimes being “bright” is too cute by half.

    What you missed was I didn’t ask for some “academic” generic confusion of definitions, but for the opinions of commenters here….regarding what is “common parlance.” A really v-e-r-y simple question. Context is important, yes, but so is the common parlance when written by representatives of the people impacted.

    That said, Mespo727272 didn’t answer either, really, on a personal opinion level, but he gave better than a dis-interested response. And I answered him on that basis.

  9. “Part of your error in analysis is that you confuse statistics and studies with facts.”


    You win the crazy advocate award.

  10. As usually Happy, you and Karen are wrong on the facts and who to blame. The number is actually 4 million who can’t afford the ACA and who don’t qualify for Medicaid. This is due to Republican led states refusing to expand Medicaid to cover this gap. The intellectual challenged Repubs don’t get to figuratively kill their parents and then lament their orphan status.

    Query is it ok to just makeup facts to support tenuous arguments?

    1. mespo wrote: “… is it ok to just makeup facts to support tenuous arguments?”

      Part of your error in analysis is that you confuse statistics and studies with facts. Another part of your error is not grasping the context of the numbers you erroneously call facts.

      Here is an analysis to chew on:

      US Census Data: Uninsured Rate…Increased in 2014?

      “Data were collected from a sample of 68,000 households in February, March, and April of 2014. That survey found that 42 million—13.4 percent of the population—were uninsured in 2013.”
      … …
      “That’s still a fraction of CBO projections and the White House’s politicized estimates. Speaking of which, HHS announced last week that the current number of exchange enrollees is 7.3 million, down from the much-touted “eight million” number. How could that official statistic differ so dramatically from the CDC and Census data? Well, the large majority of exchange enrollees previously had insurance. They’re signing up for Obamacare having lost their existing plans, in violation of the president’s promise. Those people don’t count as “newly” insured, except in the administration’s imagination.”

    2. Mespo727272

      Actually, I am very long on facts. I am a veritable fact machine.

      Ohh look at this fact.

      Effect of Sequestration on Small Business Health Care Tax Credit – Tax-Exempt Employers Only

      This means that refund payments processed on or after Oct. 1, 2014, and on or before Sept. 30, 2015, issued to a tax-exempt taxpayer claiming the Small Business Health Care Tax Credit under section 45R will be reduced by the fiscal year 2015 sequestration rate of 7.3 percent (regardless of when the original or amended tax return was received by the IRS). The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise impacts the sequester, at which time the sequestration reduction rate is subject to change.

      And we can’t forget that Fact that the Medicare tax went up .9 percent in 2013 – one of the many things to cover this boondoggle.

      Oh – Messppoo

      And then – there was aahahah – you can keep your plan

      Minimum Value

      On April 26, 2012, the Department of the Treasury and IRS issued Notice 2012-31, which provides information and requested public comment on an approach to determining whether an eligible employer-sponsored health plan provides minimum value.

      (the people are sooo stupid)

      And You can keep your Doctor Too!!!


      On November 4, 2014, the Department of the Treasury and IRS issued Notice 2014-69, which provides additional guidance regarding whether an employer-sponsored plan provides minimum value coverage if the plan fails to substantially cover in-patient hospitalization services or physician services.

      I can just see those people in Servco in Fenton sleeping with the forms with nothing to do saying “I can’t heeaaarr yooouuu”

      Mespo. Some of us like Karen and Ari and Dust Bunny Queen have experience with this crapola.

      You want to play some more. Okay. I am waiting

  11. Robert Altman:

    The only thing arbitrary and capricious is your unlettered criticism. The figure is actually 26000 who died annually due to lack of healthcare dye to being uninsured. The study was commissioned by familiesusa, a nonpartisan, non
    To fit organization that studies healthcare issues among other things.

    Try to explain away your desire to see 26000 people die needlessly. I dare you.

  12. Keep ACA the law of the land or I’ll kill 25000 people, just to prove my point. Yes, the number is arbitrary and capricious, just like all my facts.

  13. Ari:

    Statutory interpretation involves more than just one word in a statute. It means looking at the entire provision to glean the intent of Congress. Courts give deference to the implementing agencies if the language is susceptible to two meanings or is ambiguous. This is nothing new. It’s only new to you because you haven’t read hundreds of cases involving statutory interpretation. The Fourth a Circuit got it right because they applied the rules of statutory construction as they’ve been applied for eons. SCOTUS may follow suit or reach a political interpretation gutting the law. If they do, about 25000 of your fellow Amerucans will die from lack of healthcare. That’s what’s riding here and what those attacking the law fail to address.

  14. Davidm:
    “There is no clear evidence that overall people who go to doctors for health care are more healthy than those who do not. If a person chooses good diet and exercise over potions and pills, that is their freedom of choice and you ought not infringe upon that right. For you to claim now that I put a financial burden upon you and others for doing so is pure lunacy. I would stack my lifetime health care bills for my family of 7 against yours any time you like. I am certain that by my choice not to buy health insurance, I have spent far less than you and your insurance company have for your health care. ”


    Either never get old or execute a waiver of EMTALA and maybe I’d believe you. As it stands now, I have the affirmative obligation to fund you and your family through acute life-threatening medical situations at hospitals of your choosing until you are medically stable. I pay for this through higher charges and increased fees to cover your inability to pay. If you refuse Obamacare at least I get Something back by way of fines. How’s does it feel to be a welfare queen without the poverty? Btw, your first sentence is absurd on its face.

    1. mespo wrote: “I have the affirmative obligation to fund you and your family through acute life-threatening medical situations at hospitals of your choosing until you are medically stable.”

      From my perspective of the role of government, you have no such obligation. So what you are saying here is that you assume an obligation which I do not want you to assume, and then you penalize me for it.

      mespo wrote: “I pay for this through higher charges and increased fees to cover your inability to pay.”

      I have always had the ability to pay my bills. You falsely assume that I will not be able to pay at some point in the future because you support a money making racket of health insurance that I think should be boycotted. I keep telling you that I do not go to hospitals but you just choose not to believe me. You wrongly assume that at some point your system will have to take care of me. If my living will is followed, that will never happen.

      mespo wrote: “If you refuse Obamacare at least I get Something back by way of fines.”

      In other words, you steal from me through government coercion to support a system that I do not believe in.

      mespo wrote: “Btw, your first sentence is absurd on its face.”

      Nothing is wrong with my statement. People who go to hospitals and doctor offices are less healthy than people like me who avoid such places. I have observed this all my life. I have a sister who is a medical doctor and I have an identical twin brother whose wife is a nurse. They turn to the medical establishment and both have had many health problems that I have not had. Even in routine things like delivering babies, my brother’s wife has gone to the hospital who then impose procedures that lead to infection and suffering and long recovery times, whereas we have avoided such things by having our babies at home in my bedroom. My own father also trusted in the medical establishment and died at the young age of 65. There are certain specific situations where medical care can help, but overall, people just assume that doctors know best. The truth is that doctors can’t heal. Bodies heal themselves. Doctors in certain situations can help, but in many cases they do the opposite. Consider the following article from liberal Senator Bernie Sanders government website:

      “Preventable medical errors in hospitals are the third leading cause of death in the United States, a Senate panel was told today. Only heart disease and cancer kill more Americans.”

      “The Journal of Patient Safety recently published a study which concluded that as many as 440,000 people die each year from preventable medical errors in hospitals. Tens of thousands also die from preventable mistakes outside hospitals, such as deaths from missed diagnoses or because of injuries from medications.”

  15. David, I wasn’t getting anything backwards. I was simply stating a preference for where my taxes go, since I’m going to have to pay them anyway.

  16. DBQ – so true. When I married my husband, i was sure his CPA was a complete moron. NO WAY was it possible that it cost that much to be self employed, or that he paid that much taxes.

    Every voter should have such an eye opening moment.

  17. Happy – you’re right. The rise of health insurance actually contributed to spiraling healthcare costs.

    Nick – I am gobsmacked to see the Faithful keep proclaiming how wonderful Obamacare is. Obamacare is a gift to insurance companies.

    1. Yes, you are right Karen and I would like to know about those 30 million that can’t afford insurance at all and make under 10 thousand a year and are accruing penalties of 1 percent a year as we speak. What about them? They are screwed 6 ways of Sunday by the evil Obama Reid and Pelosi

  18. The ACA is indefensible, if for no other reason than that it makes health insurance unaffordable to the unsubsidized middle class.

    You do not provide health care to the poor by taking it away from the middle class, or by knocking the middle class into poverty.

    That is no “solution”, unless you think that burning your house down is the “solution” to a termite problem. Or, worse, burning your neighbor’s house down.

    And no, you cannot “fix” the ACA in order to solve the problem of its unaffordability. Take away any of the problems – such as the high premiums, and the entire system fails.

    Honestly, do people just not know math anymore? What did they think would happen when they added all those “freebies” like 26 forms of birth control with no copay, keeping “kids” on until they’re 26, and subsidizing a lot of people?

    What is really sad is that at least before, people could shop around for the benefits and premiums they could afford. Now it’s all the same, because a set amount of benefits are mandated, so it’s ALL unaffordable. Gee, thanks so much for “helping us”, Liberals. Let’s see how many Liberals are willing to put their money where their mouths are, and become poor instead of middle class. Or is that just OK for “other people” while the employer mandate gets delayed?

  19. Obamacare is bringing down the Dem party. Dem pols know that as they have lost Congress and many state houses. But, the Baghdad Bob’s here are hunkering down and doubling down on stupid. It is amazing to watch. Anything to protect the cult leader. Anything.

    1. Nick Spinelli

      George Orwell 1984

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