The Supreme Court, King v. Burwell, Obamacare and Equal Protection

The U.S. Supreme Court will issue its second major decision regarding the Patient Protection and Affordable Care Act (aka Obamacare or “ACA”) in the next few months in King v. Burwell.  For the following reasons, it seems unlikely the U.S. Supreme Court will strike down the law.   The issue is whether a “state exchange” includes the federal exchange.   Whether premiums subsidies can be received and whether employers are subject to penalties turn on the issue.  Some argue that there is a drafting error in the statute that the Court should correct or declare as something it can substantively correct.  Other argue the language means what is says, and must be enforced as such.  Practically, the Court could rule that the language means what it says, but still uphold the law.   Alternatively, it could uphold part of the law (as it did in its initial ruling on the law).  In Bolling v. Sharpe, 347 U.S. 497 (1954), the U.S. Supreme Court ruled that Equal Protection Clause of the 14^th Amendment to the U.S. Constitution (holding that no state may deny people within its jurisdiction the equal protection of the laws) applies to the federal government under the due process clause of the Fifth Amendment (relating to fundamental fairness of laws).  Why this matters:  Granting premium credits only to people who live in states where there is a state exchange likely violates this combination of the 14^th and 5^th amendments.  As such, the law could be found to be unconstitutional to the extent it provides disparate treatment.  The question then becomes:  What is the remedy?  It seems likely the Court would determine the remedy to be all Americans are entitled to the subsidies.  Then, the question must be raised with respect to employer penalties.  Does the same “protection” apply to them, such that employers operating exclusively in states without a state exchange must be subject to penalties as well?    Query how the Court would deal with such an issue?  The employer not potentially subject to the penalties would be placed at a competitive advantage relative to a competitor potentially subject to the penalties.  Arguably, a penalty needs to apply to all (or none) to prevent unfair competition. I think the Court will grapple with these questions, as it is a better alternative than to try to determine the legislative intent of a law with no legislative history (as is the case for ACA) or to “gap fill” or rewrite a statute.  It is unfortunate that the Republicans do not have an alternative system in place, such that the Democrats could negotiate for a deal with the Republicans, thereby mooting the need for the Supreme Court to decide the issue.