King v. Burwell: a discouraging mid-argument report [UPDATED] [WITH FINAL UPDATE]

Eric Citron at Scotusblog provides a mid-argument report on King v. Burwell, the vital Obamacare case being heard by the Supreme Court today. According to Citron, the petitioners, who argue that subsidies are not available on the federal exchange faced a troubling question from Justice Kennedy, on whose vote the case may very well turn.

Kennedy, says Citron, “expressed deep concern with a system where the statute would potentially destroy the insurance system in states that chose not to establish their own exchanges – likening this to an unconstitutional form of federal coercion.” Recall that part of the argument in favor of the view that subsidies aren’t available on the federal exchange is the idea that Congress set up Obamacare this way to induce states to establish their own exchanges. This is what Jonathan Gruber famously said.

If I understand the import of Kennedy’s questioning, he’s concerned that such a scheme might be unconstitutional. If so, then he might strain to construe the statute as not “coercing” the states to establish exchanges, and therefore not withholding subsidies to residents of states that opt not to have exchanges.

Let’s see, though, how the questioning of the government’s lawyer goes.

UPDATE: The argument that petitioners lack standing to challenge the statute has not gone well. Of note, Justice Sotomayor seemed to reject. This might mean she wants to the Court to rule on the merits because she’s confident now the government will win.

FINAL UPDATE: According to the Washington Post’s account of the oral argument, the government lawyer faced hostile questioning only from Justices Scalia and Alito. Chief Justice Roberts reportedly never tipped his hand. And, as noted above, Justice Kennedy’s questioning suggests that he more likely than not will uphold subsidies for those purchasing insurance on the federal exchange.

So Obamacare may well dodge another bullet. If so, it shouldn’t come as a major surprise. Unlike the four liberal Justices, who are basically on a political mission, the right-of-center group includes independent-minded Justices, and can’t really be considered a bloc when it comes to big cases.

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