Could the Supreme Court stay its decision in King?

What would happen if the Supreme Court rules for the challengers in King? Not down the line, but immediately? I’ve heard some suggestions that the Court, keen to avoid the upheaval of insurance markets, might enter a stay or otherwise give the administration and Congress time to come up with a fix.

That’s wishful thinking. The King challengers maintain that Congress has not authorized the IRS to defray the cost of health plans in states with federally established exchanges. If the Supreme Court accepts that argument, its judgment would take effect almost immediately: under Supreme Court Rule 45, a mere twenty-five days after the opinion is released, most likely in late June. At that point, any IRS employee who continued to pay out tax credits would be committing a crime.

Unless I’m missing something, there would be no legal basis for entering a stay. A stay is a procedural device for maintaining the status quo during the pendency of judicial or administrative proceedings—in particular, appeals. To get a stay, it’s not enough to say that a judgment will prove disruptive. You also have to show that there’s some chance the judgment might be overturned. Should the Supreme Court invalidate the IRS rule, however, there wouldn’t be anyone left to appeal to. The case would be over.

Remember, too, that the Constitution gives Congress—and only Congress—the power to appropriate money. If the King challengers win, the Court would have held that Congress has not appropriated money for people who buy health plans on Because the Court can’t confer authority on the executive branch to make withdrawals from the Treasury, entering a stay in the absence of such an appropriation would arguably work an end-run around the Constitution.

To be sure, the D.C. Circuit does sometimes decline to vacate agency rules, even those that are found to be arbitrary and capricious. When there’s a chance that an agency could cure a rule’s defects by offering a better justification for its adoption, and when invalidation of the rule would prove disruptive, the court can leave the rule intact while remanding to the agency for further proceedings.

But even if the Supreme Court had endorsed the practice, it only applies in cases where a rule has been “inadequately supported,” not where the rule is inconsistent with law. In statutory cases—and King is such a case—no amount of explanation can salvage a busted rule. Invalidation is the only option.

A government loss in King could thus lead to chaos on the federal exchanges as early as midsummer 2015. For shoppers on, tax credits, which are issued on a rolling basis, would end abruptly in July. With those credits, the average person buying a silver plan this year spent just $69 a month. Without them, she would have to fork over $345 per month. Many people will have no real choice but to drop coverage.

Those who do retain insurance will typically be sicker than those who stop paying premiums, skewing insurers’ risk pools and leading to larger-than-anticipated losses. Reinsurers and risk corridors would pick up some of the slack, burdening both the financial markets and the federal government. And tens of thousands of people who lose their insurance will either go without needed medical care or face bankruptcy when they get into a serious accident.

I don’t mean to paint too bleak a picture. Come June, the Supreme Court might uphold the IRS rule. But if it strikes it down, don’t look to the Court to help pick up the mess.


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