Supreme Court Upholds Affordable Care Act Subsidies

In a 6-3 decision, the Supreme Court ruled that the Affordable Care Act (ACA) intended to make subsidies available to all Americans who are eligible. The decision preserves subsidies for approximately 6.4 million people in 34 states that rely on the federal exchange and gives the Obama administration its second major ACA victory in three years.

Oral arguments for the King v. Burwell hearing took place in March of this year. The case was focused on a four-word phrase, “established by the state,” that led the plaintiffs to argue subsidies should only be available in states that set up their own exchanges. However, the court ruled that the legislative intent of the law is clear and, despite the bungled language in question, all exchanges should receive subsidies.

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts wrote in the majority opinion.

Roberts, who was joined by Justice Anthony Kennedy as the two swing votes who sided with the court’s four liberal members, argued that eliminating the subsidies would send the ACA into a death spiral, which could not have been the intent of Congress.

“The combination of no tax credits and an ineffective coverage requirement could well push a state’s individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner,” he wrote.

Roberts was also the key vote in the 2012 Supreme Court case that ruled that the ACA was constitutional, albeit with the important caveat that states could not be forced to participate in the Medicaid expansion. In today’s decision, Roberts likely helped cement President Obama’s signature achievement.

Before the ruling was announced, Health and Human Services Secretary Sylvia Burwell said it would be time to “move on” if the court were to rule in favor of the ACA for a second time. Time will tell if that indeed proves to be the case, however the decision undoubtedly entrenches the ACA as the law of the land at least until 2017. Should a Republican win the 2016 presidential election the topic of “repeal and replace” will surely take center stage and the ACA may once again be in peril. If a Democrat succeeds Obama in the White House, however, then the ACA battle would likely be settled once and for all.

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