Educators are watching the latest challenge to the federal health-care law to come before the U.S. Supreme Court, with an eye to its potential impact on school districts’ employee-benefits policies. The justices heard extended arguments this month over a key provision of the Affordable Care Act.
There was no clear indication from their questions how the court will rule in the case of King v. Burwell (No. 14-114) on whether President Barack Obama’s administration is observing the law by allowing tax subsidies to go to individuals in 34 states that have declined to establish their own health-insurance exchanges.
A group of Indiana districts that is separately challenging the law’s employer mandateon the side of four Virginia individuals who say in the case just heard by the court that they would be harmed by the ACA. Meanwhile, the National Education Association filed a brief in support of the law because it says the ACA has expanded health care to more Americans.
The Virginia residents say the law requires them to pay at least some amount out of pocket for coverage they don’t want. One of the challengers, Brenda Levy of Richmond, is a substitute teacher. During the March 4 arguments, some justices questioned whether she and the other challengers have legal standing, based on concerns that they might be eligible for alternatives such as veterans’ coverage or Medicare.
Michael A. Carvin, the lawyer representing the challengers, said that even though Ms. Levy will turn 65 this year, she still faces the prospect of penalties for not having health coverage in 2014.
The arguments moved quickly, though, to the merits of the case.
“The only provision in the [ACA] which either authorizes or limits subsidies says, in plain English, that the subsidies are only available through an ‘exchange established by the state under Section 1311,’ ” Mr. Carvin said.
Justice Elena Kagan told Mr. Carvin that “it’s not a simple four or five words. … It’s the whole structure and context of the provision.”
U.S. Solicitor General Donald B. Verrilli Jr. said that the challengers’ reading of the text “produces an incoherent statute that doesn’t work.”
Justice Antonin Scalia said the ACA probably has numerous “ill-considered” provisions, and Congress could be expected to step in and fix the law if the Internal Revenue Service rules at issue in the case were struck down.
“Well, this Congress … theoretically they could,” Mr. Verrilli replied, as a courtroom packed with several high-ranking U.S. senators and representatives laughed at his reference to congressional gridlock.
Justice Anthony M. Kennedy expressed federalism concerns, including that the challengers’ reading of the law would be so problematic for the states that didn’t establish their own exchanges that it would make the law unconstitutionally coercive. That might call for accepting the Obama administration’s interpretation to avoid such a constitutional ruling, he suggested.
Mr. Carvin said that Justice Kennedy’s logic on that point would jeopardize all manner of federal funding statutes, including the No Child Left Behind Act.
One member of the court was uncharacteristically quiet for most of the 80-minute argument: Chief Justice John G. Roberts Jr., who provided the pivotal vote in 2012 to uphold the ACA’s individual mandate.
A decision is expected by late June.
A version of this article appeared in the March 18, 2015 edition of Education Week as Educators Await Decision on Health Law