Why Most Health Wonks Aren’t Fretting About This Year’s Biggest ACA Court Case

Like schoolchildren on a class trip, reporters lined up in the halls of the Supreme Court, waiting to be let into an overflowing press gallery — chairs wedged on top of each other, seats strictly assigned — much as they had on another chilly March day.

A plaintiff, challenging an Obamacare mandate.

Paul Clement squaring off against Don Verrilli.

It felt all too familiar.

“Hobby Lobby Day; yippee. Though seems more like Groundhog Day,” tweeted Harvard’s David Cutler, as snow fell again in Washington’s never-ending winter.

And yet …

While the Court was still High, the stakes had been lowered.

Two years ago today, Verrilli, Clement and other lawyers began their three days of epic arguments over the Affordable Care Act’s constitutionality. And weeks later, we discovered the ACA’s survival rested on a lone vote from Chief Justice John Roberts, with his support for the law marking the difference between disaster and delirium for the White House.

This week, experts flocked to hear a 95-minute sprint of debate over the law’s contraception mandate. And once again, the justices are expected to rule narrowly, regardless of whether a dazzling Clement seems destined to outshine plodding Verrilli.

Observers agree: A White House defeat in Sebelius v. Hobby Lobby would be a blow to the ACA.

But not a killing one.

Instead, it’s another case — the one out of the spotlight and down the street — that has ACA-watchers in a tizzy.

Looking at the Hobby Lobby Case

Four years and countless court challenges after its passage, the ACA’s structural integrity isn’t really on trial anymore. Today, the law is increasingly integral to the nation’s health system, wound so tightly into the industry that it would be difficult to unwind.

Most states are expanding coverage through Obamacare’s Medicaid provisions. Hundreds of hospitals are participating in its payment pilots. Millions more Americans now have health insurance thanks to HealthCare.gov and the state-based exchanges.

So unlike the challenges that dogged Obamacare two years ago, Sebelius v. Hobby Lobby is a more narrow test.

  • The case centers on a two-decade-old congressional law called the Religious Freedom Restoration Act that allows individuals to win federal exemptions if a law burdens their religious practice.
  • Two companies — Hobby Lobby, an arts and crafts retail chain, and Conestoga Wood, which produces cabinets — argue that they should be able to invoke RFRA to be exempt from the ACA’s contraceptive coverage requirements. (Their arguments have been consolidated at the Supreme Court.)
  • The two companies’ owners believe that providing such coverage to employees would violate their religious beliefs; they say that intrauterine devices and emergency contraceptives are tantamount to abortifacients.

The case may turn on whether the government can prove it has a “compelling interest” in ensuring that women have access to contraceptives. That could be a tall order.

But the plaintiffs’ argument raises new legal questions, too. Can a corporation have a religious preference? If so, “who says it?” Justice Sonia Sotomayor asked on Tuesday. “The majority of shareholders? The corporate officers? … And how much of the business has to be dedicated to religion?”

And even if the court finds in favor of the challengers — which could open up new legal challenges to other distinct parts of the ACA, like whether vaccinations should be covered as an essential benefit — how much would the ruling affect the ACA’s long-term prognosis?

That’s why Tuesday’s hearing was something of an oddity for health care observers. In Sebelius v. Hobby Lobby, the court heard a case that’s hugely important for legal theory; it could end up being “the signature ruling” of the term, the Washington Post reports.

But the more important case for health reform was unfolding a mile to the west, in D.C.’s Court of Appeals.

Looking at the Halbig case

In Halbig v. Sebelius, plaintiffs are challenging whether the ACA’s subsidies in the federal exchange are legal, given that the law doesn’t explicitly call for them.

(Regular readers of “Road to Reform” may recall last summer’s close look at Halbig v. Sebelius.)

And that’s why, while the case is seen as a legal long-shot, a growing coterie of observers — like Jason Millman at the Washington Post and Alec MacGillis at The New Republic — warned this week that it could have a much bigger impact on Obamacare’s implementation than Hobby Lobby. More than 2 million exchange shoppers likely have already taken advantage of those subsidies, with millions more Americans expected to lean on them in years to come.

Tuesday’s Halbig hearing also raised new concerns for the White House, Phillip Klein writes at the Washington Examiner.

“Based on the oral arguments, two of the three justices seemed at least open to the idea of striking down the [subsidies],” Klein concluded, “which would almost certainly send the issue to the Supreme Court.”

And “even this possibility should be enough to make Obama administration officials a bit nervous,” he added, “given how dramatically an adverse ruling could affect their implementation strategy for the health care law.”

Around the nation

Here’s a look at what else is making news on the road to reform.

What happened after the Halbig hearing ended: Writing at The Incidental Economist, Nicholas Bagley sums up a new fight that unfolded on Tuesday afternoon.

Supporters’ quest for exchange sign-ups: The Obamacare enrollment push in Mississippi “rolls into town in a lime green bus,” writes Politico‘s Jennifer Haberkorn, telling the story of Humana’s unique approach to goosing ACA sign-ups in a state where many residents lack coverage but are wary of the law. Similarly, Jeffrey Young of the Huffington Post takes a look at the arduous work of trying to get the uninsured to sign up for coverage in a rural Maryland county.

The GOP’s war against the ACA: At ThinkProgress, Igor Volsky charts out a history of Republican resistance to Obamacare.

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