There is a problem with the federalism argument that was brought up during the oral arguments for King v. Burwell last week, Ilya Somin, a law professor at George Mason University, wrote in an opinion piece for the Washington Post.
During last week's session, a few Supreme Court justices argued that the plaintiffs' case upsets the constitutional balance of federal and state powers. The plaintiffs' reading of the Affordable Care Act implies that Congress intended to coerce states into establishing their own exchanges in order to receive federal subsidies for their residents.
Justice Anthony Kennedy claimed that Congress did not write the healthcare reform law with the intention to coerce states. Doing so, he added, would create a "death spiral" of low-income Americans leaving the insurance market and premiums rising for everyone else.
Kennedy's take was "a brilliant touch," Mark Gallant, a health lawyer at Cozen O'Connor in Philadelphia, told the New York Times. "He used the plaintiffs' own argument against them to suggest that it would be unconstitutionally coercive if Congress made the subsidies depend on a state's decision to establish an exchange."
But Somin disagreed. "The federalism canon does not protect states against all painful choices created by federal statutes ... and therefore can't be used to justify interpretations of federal law that actually expand the scope of federal power rather than restrict it," he wrote.
Additionally, Somin added, the federalism argument uses "doctrines developed to protect state governments against potentially excessive federal intrusion to justify an interpretation of the ACA that expands federal power rather than limits it."
Here's how Somin breaks it down: Should the plaintiffs win, states can establish their own exchanges, and thereby provide residents with subsidies, or forgo the process entirely and, in turn, free many residents from the ACA's employer and individual mandates. The latter option would eliminate the federal government's role in those state's healthcare market.
If the defendants win, state governments are left with little meaningful choice. Either they establish their own exchanges or use the federal government's exchange. Such a ruling would enable the federal government to play a larger role in states' insurance markets, as states would have no choice but to use the exchanges and require residents to get insurance.
Regarding the case as a whole, Somin mentioned that the federal government's case may be right--but the case for federalism is not. "You cannot defend a net expansion of federal power by appealing to legal doctrines intended to protect states' rights."
A decision on King v. Burwell is expected in June.