UPDATE: I posted what follows in January, reflecting on the JALSA amicus brief led by Prof. Abigail Moncrieff from BU that argues that petitioners’ interpretation in King v. Burwell would make the ACA unconstitutional by forcing states to choose between establishing exchanges and torpedoing their individual health insurance markets. In other words, “death spirals to the rescue.” It looks like that argument got noticed by Justice Kennedy, who pressed the petitioners hard for a response at oral argument this morning. (See here.) A very interesting development, and congratulations are in order to Abby and the other JALSA signatories (as well as other amici who pressed this argument) for at the very least helping to call attention to an argument that wound up playing big at argument. Will be interesting to see how the opinion comes out!
ORIGINAL POST (Jan. 27, 2015):
We’ve heard a lot about “death spirals” and how they could stand in the way of the Affordable Care Act’s goal of a functioning individual health insurance marketplace. Seth Chandler has an interesting blog devoted to the subject, “ACA Death Spiral.” And those who have been following King v. Burwell, the Supreme Court’s latest ACA case, have been predicting that a ruling against the government there would be disastrous because it would only exacerbate the “death spiral” threat to individual health insurance markets. (See a sum-up of such predictions here.)
But could death spirals save the ACA? According to a fascinating amicus brief filed in the King case by a number of interest groups and co-signed by several prominent law professors and Bill of Health contributors (I understand that Abigail Moncrieff is the driving force behind the brief, joined by Allison Hoffman, Sharona Hoffman, Russell Korobkin, Joan Krause, Stephen Marks, Kevin Outterson, and Theodore Ruger), the answer might be yes. The argument boils down to “death spirals to the rescue.” (Here is a copy: 14-114 bsac JALSA.)
The brief begins with the observation that, as interpreted by the petitioners in King, the ACA gives states an untenable choice: establish your own exchange, or watch your individual health insurance market be destroyed by death spiral caused by the application of the ACA’s community rating and guaranteed issue requirements (which forbid insurers from charging sick people more) without the adverse-selection-countering-force of the ACA’s subsidies and individual mandate (which give healthy people a reason to buy insurance at the same rates sick people pay). This result, the amici argue, makes the ACA unconstitutional on petitioner’s interpretation. And since courts avoid interpreting statutes in ways that make them unconstitutional at all costs (under the constitutional avoidance canon, which can come before even Chevron deference), the Court should rule for the government.
How would death spirals in federal exchange states make the ACA unconstitutional? The brief offers two theories: First, the result would be a federal law that treats different states differently (applying the community rating and guaranteed issue requirements to all, but the individual mandate and subsidies only to state-exchange states), a Shelby County v. Holder problem. Second, the result would be a law that presents states with a coercive offer they cannot refuse (establish a state exchange or our community rating and guaranteed issue requirements will destroy your individual health insurance market), a Dole or NFIB v. Sebelius problem.
It’s an interesting read, and I really wonder whether the threat of MORE constitutional challenges to the ACA (and years of additional litigation) that the brief predicts would give some justices who are otherwise inclined to rule against the government pause. For die-hards (or those stuck at home in the blizzard), I came away with three thoughts that might only make sense once you’ve perused the brief:
Why wouldn’t the government focus on this argument? This brief does what an amicus brief ought to do, namely, spell out an argument that the parties aren’t really focusing on. While we tend to think the adversary system causes the parties themselves to make their best case, this particular argument in King is an example of how that is not always true. Obviously, the petitioners do not want to make an argument against their interest. As for the government, it would be awkward for it to make a throaty avoidance argument as is done in this “death spirals to the rescue” brief. Imagine the Court doesn’t buy the argument and then, as the brief predicts, courts are faced immediately after King with a series of lawsuits making the very constitutional arguments this brief anticipates. If it had been the government making the avoidance argument in that case, and not a group of law professors, government attorneys would be hard pressed indeed to turn around and defend the constitutionality of the ACA as interpreted by the petitioners in King.
The Court’s ability to assess real-world impacts: The argument in the brief hinges in large part (not entirely) on predictions about what will happen in the real world. The Supreme Court is poorly positioned to evaluate such predictions on its own. For this reason, I think the amici are right to call on the Court, toward the end of the brief, to seek out supplemental briefing from the parties (in particular the government) if it wants to know more about the potential death spiral impact of the petitioners’ interpretation.
Uncertain threats and Dole. I also worry that the Court will be reluctant to “buy” the petitioners’ coercion argument because the magnitude of the potentially-coercive “threat” to states here rests on uncertain predictions about future impacts rather than somewhat more black-and-white budgetary consequences (as was the case in Dole and NFIB). I don’t see why that should matter, and I see at least one reason why it should not (if the Court were reluctant to find uncertain threats coercive, the federal government could coerce states while dodging judicial review by increasing the magnitude of threats while making them somewhat unpredictable). But I also could see the Court being tempted to treat uncertain threats as less legitimate for constitutional purposes, especially because of its lack of expertise noted above.