Lost in these discussions especially those that have focused on the potential for immediate disarray in state insurance markets has been the procedural posture of the litigation now pending before the Supreme Court. Sometimes, and this is one of those times, analysts have to view the courts as, well, courts governed by procedural rules that normally apply to courts and that govern their behavior and outcomes.
So, this is the point here the cries of immediate disarray are shrill but misdirected because of the procedural posture of the pending case before the Supreme Court.
The lower court (the Court of Appeals for the Fourth Circuit) granted the governments motion to dismiss the case. A motion to dismiss is premised on the following reasoning: Even if plaintiffs facts are correct, their legal claim is unwarranted there is no legal violation asserted in the pleadings. If the Supreme Court agrees with the plaintiffs challenge in King, holding that the IRS regulation is invalid, then the Court can only overturn the lower courts granting of the governments motion to dismiss. Procedurally, that is the only relief that the Supreme Court can grant at this stage.
Of course, if the Supreme Court rules favorably for plaintiffs position, the plaintiffs will win their case eventually. But some additional procedural steps are needed, and they will take some time.
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At oral argument, Chief Justice John Roberts was aware of the procedural posture of the case a motion to dismiss. And Justice Samuel Alito asked about the Courts options for a phase-in type of remedy. The Court is not oblivious to these practical considerations and might even incorporate thoughts or instructions on these remedial and transitional matters. My guess is that these are the very matters of refinement still being worked out if, as I now suspect, the Supreme Court rules for plaintiffs. And these discussions might be particularly delicate as the remedial and timing issues might involve different coalitions of justices than on the issues concerning the merits of the case itself.
This breathing room will give the various players states, Congress, the Obama Administration, insurance carriers, hospitals and other providers time to consider next steps; and it will allow for a transition to the next stage without an abrupt change in the insurance status of those currently receiving subsidies but whose subsidies are not legally appropriate under a proper interpretation of the ACA.
