Imagine that you work for a federal government agency. Congress has just passed a law that requires you to write regulations to implement that law – maybe an expansion of Medicaid, or provisions of one of countless other laws that are fleshed out at the agency level. Congress didn’t spell out exactly how to implement it – they left the details to your agency, knowing you have substantial expertise in the field and knowledge of how to operationalize it.  

Many laws are ambiguous. A longstanding legal principle is for courts to leave the details of interpretation to the implementing agencies, and to limit their interference, except when the interpretation is unreasonable. If someone challenges the interpretation, the court applies a principle of deference to the agency, though with boundaries to ensure unreasonable interpretations are not upheld. This principle, called “Chevron deference,” was the law of the land for 40 years.

But things just went topsy-turvy. The Supreme Court overruled the Chevron case last month by a vote of 6-3 along party lines, in a pair of cases: Loper Bright v. Raimondo and Relentless, Inc. v. Department of Commerce. They completely upended precedent, saying that instead of relying on a reasonable agency interpretation of an ambiguity, the court reviewing the matter can step in and substitute its own interpretation. As Leo Cuello at Georgetown University Center for Children and Families observed in an excellent blog post, “If you’re a fan of efficient government and separation of powers, you just had a very bad day . . .  One judge will now effectively be able to strike down a policy developed by an entire agency, just because he ‘has a better idea,’ thanks to a new Supreme Court precedent that will harm the country and haunt the Court for decades to come.”

This disturbing decision will likely lead to a weakening of federal agencies, inefficiencies and delays in implementing many laws, much litigation, and a loss of public accountability. Advocates across the country are raising concerns about how this decision will impact Medicaid (NHeLP), Medicare (Medicare Rights Center), and more (Community Catalyst). 

The powerful dissent, authored by Justice Elena Kagan, recognized just how troubling the majority decision is:

“Today, the Court flips the script: It is now “the courts (rather than the agency)” that will wield power when Congress has left an area of interpretive discretion.  A rule of judicial humility gives way to a rule of judicial hubris. In recent years, this Court has too often taken for itself decision-making authority Congress assigned to agencies. The Court has substituted its own judgment on workplace health for that of the Occupational Safety and Health Administration; its own judgment on climate change for that of the Environmental Protection Agency; and its own judgment on student loans for that of the Department of Education . . . .  But evidently that was, for this Court, all too piecemeal.  In one fell swoop, the majority today gives itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law. As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar. It defends that move as one (suddenly) required by the (nearly 80-year-old) Administrative Procedure Act. But the Act makes no such demand. Today’s decision is not one Congress directed. It is entirely the majority’s choice.”

The extent of the fallout from the Supreme Court’s ruling will not be known for some time. Most immediately, we expect an increase in legal challenges and scrutiny across health care programs. This could slow congressional and agency work, hinder federal oversight and innovation, and create a confusing legal and compliance landscape.

Much is at stake, and the impacts are still unclear. How will Congress and federal health agencies react to or adapt to the Court’s decision? Will it become harder to pass new laws or adopt rules to implement them? We won’t have answers soon: the implications of this decision will muddy the legislative and administrative waters for a long time.