SCOTUS Ruling Upholds ACA’s Federal Subsidies in King Case
On Thursday, the Supreme Court voted 6-3 to uphold the Affordable Care Act's subsidies to help U.S. residents purchase coverage through the federal exchange, the Wall Street Journal reports (Kendall/Radnofsky, Wall Street Journal, 6/25).
Background on Case
The subsidies were challenged in the case King v. Burwell. At issue in the case was that while the Affordable Care Act says subsidies are available to help certain U.S. residents purchase coverage offered "through an exchange established by the State," a May 2012 IRS rule allowed the subsidies to be used in an exchange administered either by a state or the federal government.
A ruling striking down the subsidies could have eliminated about $28.8 billion in subsidies to 9.3 million individuals in 34 states in 2016, according to an Urban Institute analysis (California Healthline, 6/17).
Details of Ruling
The court upheld the decision by the 4th Circuit Court of Appeals. In that ruling, the appeals court wrote that "the applicable statutory language is ambiguous and subject to multiple interpretations" and therefore the government and its regulators had legal precedent to determine how to implement the law (Koff, Northeast Ohio Media Group/Cleveland Plain Dealer, 6/25).
The high court's opinion, delivered by Chief Justice John Roberts and joined by Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, Anthony Kennedy and Sonia Sotomayor, stated, "Congress passed the [ACA] to improve health insurance markets, not to destroy them" (Wall Street Journal, 6/25). It added, "If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter" (Liptak, New York Times, 6/25).
The opinion acknowledged the plaintiffs' contention that the language in the law is ambiguous. However, it stated that striking down the subsidies "would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very 'death spirals' that Congress designed the Act to avoid." It added, "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. Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation, but those requirements only work when combined with the coverage requirement and tax credits. It thus stands to reason that Congress meant for those provisions to apply in every State as well" (Leonard, U.S. News & World Report, 6/25).
Justice Antonin Scalia filed the dissenting opinion, which was joined by Justices Samuel Alito and Clarence Thomas (SCOTUS ruling, 6/25).
Ruling a 'Blow' to ACA Opponents
According to the Journal, the ruling is a "considerable blow" to ACA opponents and "leaves the law on a firmer footing" for President Obama's remaining time in office (Wall Street Journal, 6/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.