King v. Burwell Will Reverberate Well Beyond Obamacare

On March 4, the Supreme Court will hear oral arguments in King v. Burwell, a lawsuit that challenges the Internal Revenue Service’s implementation of the Patient Protection and Affordable Care Act (PPACA). Specifically, the lawsuit asserts that the PPACA limits federal subsidies to health insurance purchased from state-run health care exchanges, while the IRS has determined that federal subsidies are available for purchases on all health care exchanges-including those established by the federal government. While the decision in King v. Burwell will directly affect the ill-crafted health care law, its longer term implications will reverberate well beyond the PPACA, potentially redefining the broader constitutional balance between branches of government.

The outcome of this case is not trivial; 36 states do not have state run exchanges, and roughly five million people may lose their subsidies if the court rules that the IRS improperly implemented the legislation. But more generally, this case is about the limits of the administrative state. If the courts defer to the agency and accept the Internal Revenue Service’s rewriting of the rules, the ascendancy of the administrative state continues, at the expense of the rule of law. If, in fact, there is a problem with how the legislation is written, the Court should simply rule that Congress must clarify the law, as it has done in many instances. Yet politics is making this traditional response unpalatable for proponents of the ACA.