Will Justice Kennedy rescue ObamaCare?

On healthcare, either Kennedy or Roberts could tip the balance. Yet the 78-year-old Kennedy, appointed to the bench in 1988 by Republican President Ronald Reagan, may be in a more pivotal position based on his respect for state sovereignty and concern for the practical consequences of a decision.

While the 2012 dispute posed a broad-ranging constitutional challenge to the individual insurance mandate before it even took effect, this one turns on a mere four-word clause allowing tax credits for insurance purchased through exchanges “established by the state.”

The challengers, libertarian lawyers who were among those who lodged the 2012 attack, say that means that the subsidies are not available to people who have bought insurance through federally facilitated exchanges, which vastly outnumber state-run exchanges. The Obama administration contends the law, taken as a whole, makes clear that Congress, when it passed the law, intended the subsidies to apply to all exchanges.

During oral arguments Justice Kennedy suggested the challengers’ view of the law could put unconstitutional federal pressure on states, because if they failed to set up exchanges, they would lose subsidies: “The states are being told either create your own exchange or we’ll send your insurance market into a death spiral,” he said.

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