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Supreme Court Upholds Subsidies

The Affordable Care Act survived its second Supreme Court test in three years. In a 6-3 majority ruling, the Supreme Court upheld the federal government's authority to provide health insurance subsidies through a federal exchange.

The King v. Burwell decision ultimately hinged on just four words — “established by the State." The decision reviewed in detail if this phrase, in the context of the overall “statutory scheme,” meant simply that subsidies were only available to individuals who enrolled in an insurance plan on an exchange actually established by a state; or, if it could mean that these subsidies were available to individuals who enrolled in an insurance plan on either a state or a federal exchange. After looking at the language in the context of the entire statute, the court decided on the latter interpretation. The 6-3 ruling stopped a challenge that would have erased subsidies in at least 34 states for individuals and families buying insurance through the federal government’s online marketplace.

Chief Justice John Roberts wrote the opinion for the court, joined by Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonya Sotomayor and Elena Kagan.

Though there was much discussion in the opinion about the “inartful drafting” of the ACA, ultimately, the majority did not allow this to persuade them to hand down a ruling that could potentially dismantle the ACA. Indeed, Roberts’ wrote, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them….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.” Based on this ruling, at this juncture, everything regarding the ACA remains status quo.

Source: Kaiser Health News; The Council of Insurance Agents and Brokers

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