‘Death Spiral’
“We’re going to see insurance pools that are largely dominated by people with major health problems,” said Ron Pollack, executive director of Families USA and a supporter of the law.
That could raise coverage costs for insurers, forcing them to raise rates and eventually sending the market into what the administration says would be a “death spiral.” Hospitals would be left to foot the bills for more uninsured patients.
Political leaders in states without exchanges would probably then face new calls to set up their own marketplaces. One possibility is that a state could “establish” its own exchange and authorize the federal government to run it.
For now, the question is whether the Supreme Court will take up the issue at all. In the case in front of the justices, a federal appeals court based in Richmond, Virginia, upheld the IRS regulation in July on a 3-0 vote. On the same day a federal appeals court in Washington reached the opposite conclusion, rejecting the administration’s approach in a 2-1 ruling.
Although that sort of appellate division normally makes Supreme Court review likely, a larger panel of judges on the Washington court has since agreed to reconsider its case. That at least temporarily eliminated the split, easing pressure on the high court to get involved.
The attorney leading the legal challenge, Michael Carvin, contends that the issue is too important for the court to wait.
“Billions of taxpayer dollars are pouring out of the Treasury absent congressional authorization and millions of Americans are ordering their lives around an impugned regulation,” Carvin wrote in a court filing.
Carvin, an attorney with Jones Day in Washington, also argued against the law in the 2012 case. In the latest dispute, he represents four Virginia residents who say they don’t want to buy insurance on the government-run exchange.
Although the justices could reject the appeal as soon as Nov. 3, a decision accepting the case wouldn’t come until at least Nov. 10 under the court’s normal practices.
The high court may not be eager to get involved, Ruger said. The justices endured a divisive clash in 2012, punctuated by reports that Chief Justice John Roberts switched sides late in the court’s deliberations to provide the decisive vote to uphold most of the law.
“The justices don’t want another major ACA case anytime in the near future,” Ruger said. “I just think this is not an issue they want to re-litigate.”
The case is King v. Burwell, 14-114.