5 Things To Watch In SCOTUS' Obamacare Arguments

Obamacare's third date with the Supreme Court is almost here.

But this isn't like the 2012 case over the individual mandate, or even the Hobby Lobby case—both of which centered around high-minded constitutional questions about the limits of congressional power—or the nature of commerce. Wednesday's arguments will focus on the nitty-gritty of the law's text, and whether it has been implemented legally in accordance with that text.

The implications for the law are significant: some 7 million people would likely lose their coverage if the court sides against the White House. Here are five questions to watch for, which will help determine who walks out of the courtroom victorious in King v. Burwell:

How broad is John Roberts' focus?

Both sides in this case believe the text of the Affordable Care Act is all they need to win—and it might be their only chance, given the conservative justices' generally strict approach to statutory interpretation. David Rivkin, who's arguing for the challengers, will want the court to start its analysis with six words in the formula for calculating Obamacare's subsidies: the line that refers to subsidies flowing through "an Exchange established by the State."

Solicitor General Donald Verrilli, on the other hand, will want the court to think of "the text" as broadly as possible—to focus on sections that treat state and federally run exchanges as interchangeable, at least practically.

Chief Justice John Roberts has said in past decisions that the court should consider the text of entire statutes, so he should be at least open to Verrilli's tack. But the weakest spot in the Justice Department's argument is explaining why the words "established by the State" appear in the subsidies formula, if not to limit subsidies to state-run exchanges. So it's also easy to imagine Roberts prodding the solicitor general on that point.

If Roberts moves off of those few words easily and engages with other sections of text—including the phrase "such exchange" or the definition of a "qualified individual" who can use the exchanges—it'll probably be a good sign for the government. If he demands an answer on "established by the State," Verrilli will likely have a much harder time.

Will anyone care about federalism?

The federalism strand of the pro-Obamacare argument has gotten more attention in the public debate lately than it has in the actual briefs in the case, but it's one that could appeal to both Roberts and Justice Anthony Kennedy. It's an extension of one of the government's textual arguments: If Congress actually wanted to limit Obamacare's subsidies to states that ran their own exchanges, why would it bury that extremely important information in a formula?

A group of pro-Obamacare states argued in a brief to the Supreme Court that, when they made their decisions about setting up a state-run exchange, no one told them their decision could deny subsidies to their residents and throw their insurance markets into chaos. And that would have been pretty useful information.

The argument is aimed at Roberts, who has said previously that states deserve "clear warning" of the strings Congress attaches to their decisions; and to Kennedy, who's seen as more likely than his fellow Republican appointees to base his decision on factors other than the text. Jonathan Adler, one of the conservative legal scholars who helped make this challenge happen, has said he takes the federalism argument seriously.

Is the law ambiguous?

Both sides argue that the law is clearly on their side. But what if it's not?

There's a way for the challengers to win if the justices decide the law is unclear, but the government has the better odds. In many cases, when statutes are unclear, the courts defer to the interpretation of the agencies implementing them. That principle, known as Chevrondeference, has been around for a long time, and it was the basis on which a lower court upheld Obamacare's subsidies nationwide.

To have their strongest day, the challengers in King would need to persuade the court that the law clearly and unambiguously limits subsidies only to certain states. If the court seems to think the statute is unclear, it'll be a question of how it settles that ambiguity: through Chevron deference; or by saying, in effect, the text says what it says, even if it wasn't meant to.

What about the practical implications?

As a policy matter, the subsidies are part of a "three-legged stool" designed to make the Affordable Care Act work. Wipe out one leg of that stool, and the whole system could begin to tip over. Similarly, Obamacare is real now: About 11 million people have coverage through the law's exchanges, and the majority of them would lose that coverage if the court sides with King.

None of that matters, legally. But in a case that comes down to parsing one small phrase versus another, legal experts say, there's plenty of room for other, non-legal considerations.

They could cut either way: Some liberals worry that Kennedy has simply made up his mind about Obamacare and won't be especially open to arguments he might otherwise find persuasive. On the other hand, since Kennedy often is willing to think more about the real-world effects of his rulings, some analysts think the prospect of actually taking away people's health care—a reality that didn't exist yet in 2012—will push him away from a narrow reading of the text.

Does standing matter?

Standing—the legal right to bring a lawsuit—is another issue most likely to matter as a sort of subtext, but legal experts following the case are eager to see whether it comes up at all during oral arguments.

Lately, questions have arisen about whether some of the plaintiffs in King have standing. They're suing to exempt themselves from the individual mandate (which is triggered by receiving subsidies), but several of them might be exempt from it anyway. At least one plaintiff appears likely to have standing, so the case will probably go forward—but the left has sought to play up the standing questions lately in part to frame the case as simply a political attack on Obamacare, lacking in legal seriousness.

Chris Walker, a law professor at Ohio State University, said standing might give the justices an escape hatch if they come away from oral arguments not wanting to rule definitively.

"I think it's a sleeper issue that could become a real challenge," Walker said.

The Supreme Court can, at any time, simply decide not to rule in a case it accepted. Cases are "dismissed as improvidently granted"—and the justices don't have to explain why they're not ruling. That could happen here, Walker said, if the court decides that King is a bad vehicle for this issue, or if the conservatives want to try again with better plaintiffs—in which case we'd likely end up right back here a few years from now.

(Image via Steve Heap /Shutterstock.com)