Obamacare on the line at SCOTUS

The future of health care in America is on the table — and in serious jeopardy — this morning in the Supreme Court.

After more than an hour of arguments Wednesday, the Supreme Court seemed divided in a case concerning what Congress meant in one very specific four-word clause of the Affordable Care Act with respect to who is eligible for subsidies provided by the federal government to help people buy health insurance.

If the Court ultimately rules against the Obama administration, more than 5 million individuals will no longer be eligible for the subsidies, shaking up the insurance market and potentially dealing the law a fatal blow. A decision likely will not be announced by the Supreme Court until May or June.

The liberal justices came out of the gate with tough questions for Michael Carvin , the lawyer challenging the Obama administration’s interpretation of the law, which is that in states that choose not to set up their own insurance exchanges, the federal government can step in, run the exchanges and distribute subsidies.

Carvin argued it was clear from the text of the law that Congress authorized subsidies for middle and low income individuals living only in exchanges “exstablished by the states.” Just 16 states have established their own exchanges, but millions of Americans living in the 34 states are receiving subsidies through federally facilitated exchanges.

But Justice Elena Kagan, suggested that the law should be interpreted in its “whole context” and not in the one snippet of the law that is the focus of the challengers. Justice Sonia Sotomayor was concerned that the challenger’s interpretation of the law could lead to “death spirals” in states that hadn’t established their own exchanges.

Although all eyes were on Chief Justice John Roberts—who surprised many in 2012 when he voted to uphold the law—he said next to nothing, in a clear strategy not to tip his hat either way.

“Roberts, who’s usually a very active participant in oral arguments, said almost nothing for an hour and a half,” said CNN’s Supreme Court analyst Jeffrey Toobin, who attended the arguments. “(Roberts) was so much a focus of attention because of his vote in the first Obamacare case in 2012 that he somehow didn’t want to give people a preview of how he was thinking in this case. … He said barely a word.”

Justice Anthony Kennedy asked questions that could be interpreted for both sides, but he was clearly concerned with the federalism aspects of the case. He grilled Carvin on the “serious” consequences for those states that had set up federally-facilitated exchanges. At one point he told Carvin that his argument raised “a serious constitutional question.”

The IRS—which is charged with implementing the law—interprets the subsidies as being available for all eligible individuals in the health exchanges nationwide, in both exchanges set up by the states and the federal government. In Court , Solicitor General Donald B. Verrilli, Jr. defended that position.

Verrilli’s toughest critics were the vocal conservatives, Justice Antonin Scalia and Justice Samuel.

Only Justice Ruth Bader Ginsburg brought up the issue of standing – whether those bringing the lawsuit are inured by the law – suggesting that the Court will get to the merits of the case..

President Obama has expressed confidence in the legal underpinning of the law in recent days.

“There is, in our view, not a plausible legal basis for striking it down,” he told Reuters this week.

Wednesday’s hearing marks the third time that parts of the health care law have been challenged at the Supreme Court.

In this case — King v. Burwell — the challengers say that Congress always meant to limit the subsidies to encourage states to set up their own exchanges. But when only 16 states acted, they argue the IRS tried to move in and interpret the law differently.

Republican critics of the law, such as Texas Sen. Ted Cruz, filed briefs warning that the executive was encroaching on Congress’ “law making function” and that the IRS interpretation “opens the door to hundreds of billions of dollars of additional government spending.”

In a recent op-ed in the Washington Post, Orrin Hatch (R-Utah) and two other Republicans in Congress said that if the Court rules in their favor “Republicans have a plan to protect Americans harmed by the administration’s actions.”

Hatch said that Republicans would work with the states and give them the “freedom and flexibility to create better, more competitive health insurance markets offering more options and different choices.”

In Court, Solicitor General Donald Verrilli stressed that four words—“established by the state”– found in one section of the law were a term of art meant to include both state run and federally facilitated exchanges.

He argued the justices need only read the entire statute to understand Congress meant to issue subsidies to all eligible individuals enrolled in all of the exchanges.

Democratic congressmen involved in the crafting of the legislation filed briefs on behalf of the government arguing that Congress’ intent was to provide insurance to has many people as possible and that the challengers’ position is not consistent with the text and history of the statute.

Last week, Health and Human Services Secretary Sylvia Mathews Burwell warned that if the government loses it has prepared no back up plan to “undo the massive damage.”

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