The Supreme Court on Thursday ruled the Affordable Care Act does not prevent tax subsidies from going to help poor and middle-class people buy health insurance in states that have refused to set up insurance exchanges under the health-care reform law.
The decision is a major victory for the Obama administration and the second time in three years the Roberts Court has ruled in support of the president’s signature domestic law. Fourteen states have so far established their own health insurance exchanges, while 36 states run by Republican legislatures ideologically opposed to the health care law have refused.
Chief Justice John Roberts again wrote the opinion for the Court, with Justice Anthony Kennedy voting this time with the majority to uphold the law. At issue in King was one of the cornerstones of the ACA: premium tax credits, otherwise known as subsidies, available to low- and middle-income people to help offset the cost of their health insurance premium.
The challengers in King claimed that the ACA only allows states, and not the federal government, to offer subsidies for health insurance purchases. One phrase in the entire health-care law was proof of this limitation, according to the challengers, who oppose expansion to health-care services. The challengers argued that Congress dictated that the subsidy structure would apply only to exchanges “established by the State,” and that phrase alone limited the availability of tax benefits solely to state-run exchanges.
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The conservative Roberts Court on Thursday rejected this argument outright.
“Here, the statutory scheme compels the Court to reject petitioners’ interpretation because it 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,” Roberts wrote for the majority.
It was unusual that the Supreme Court took the case. Despite a handful of copycat lawsuits challenging the availability of subsidies peppering the federal courts, not a single federal court of appeals has ruled against the Obama administration in those challenges. A unanimous panel of judges on the Fourth Circuit Court of Appeals ruled in favor of the administration in King, and while a divided panel of judges from the D.C. Circuit Court of Appeals ruled that the subsidies were invalid, that decision was vacated after the entire panel of judges agreed to hear the case.
Thursday’s decision marks the third time in three years conservatives have run a challenge to some or all of the ACA up to the Roberts Court. The Court in 2012 upheld the individual mandate portion of the law, but last year partially ruled against the administration’s birth control benefit in the Hobby Lobby decision.
Had the Court sided with the anti-ACA challengers in King, it could have thrown more than six million people off of health insurance coverage. According to the National Women’s Law Center (NWLC), that includes about 3.5 million women who benefit from the subsidies.
“The Supreme Court decision makes it indisputably clear that tax credits are available to those who qualify for them regardless of where they live,” Marcia D. Greenberger, co-president of the NWLC, said in a statement following the decision. “The law has made significant strides for women by prohibiting insurance practices that discriminate against women and requiring that women have coverage for critical services like mammograms, maternity care, and birth control.”
Greenberger continued: “The bottom line is that the ACA has made a profound difference in millions of people’s lives, and the Supreme Court has ensured that this landmark law will continue to deliver more and better health care for even more women and their families in the future.”
While Thursday’s decision is a definitive win for the Obama administration, it does not mark the end of conservatives’ legal challenges to the ACA. More than 40 challenges to the birth control benefit’s accommodation process are pending in federal courts, with at least one request before the Supreme Court to intervene in those challenges.