In a 6-3 decision, the U.S. Supreme Court ruled in King v. Burwell, No. 14-114 (U.S. June 25, 2015) that the Affordable CareAct (Obamacare, to many) may provide subsidies to people who cannot afford health coverage if they participate in a federally-run health exchange.
At issue were 6 words in the Affordable Care Act. The Act states that subsidies are available for people who cannot afford health coverage if they purchase insurance through “an Exchange established by the State.” The Petitioners argued that these words excluded subsidies where insurance was purchased through a federally-run exchange. Thirty-four states have federally-run exchanges; the remaining states, including Minnesota, have state-run exchanges.
Justice Roberts, writing for the majority, conceded that the Petitioners “plain-meaning arguments are strong.” However, “[T]he Statutory scheme compels the Court to reject petitioners’ interpretation because it would destabilize the individual insurance market in any State with a Federal Exchange . . .”
“The Affordable Care Act contains more than a few examples of inartful drafting,” noted Justice Roberts. An observation generally agreed upon in the dissent filed by Justice Scalia, and joined in by Justices Thomas and Alito.
The result of this decision is that the Affordable Care Act continues to operate unchanged, including reporting requirements on insurers and employers taking effect this year. And, taxpayers who meet certain income criteria will be able to receive a tax subsidy if they participate in an Exchange operated by either a state or the federal government.