SCOTUS Ruling Means Millions Of Americans No Longer At Risk To Lose Health Insurance Subsidies

The Affordable Care Act scored a major victory today as the Supreme Court upheld provisions allowing the government to provide tax subsidies for consumers who purchased insurance through the program, although their states don’t have an official insurance exchange of their own.

In plain speak, the Court’s 6-3 decision [PDF] means that individuals who get their health insurance through an exchange established by the federal government will continue to be eligible for tax subsidies.

The crux of the King v. Burwell case about federal subsidies given to more than three-fourths of U.S. states involved just four words: “established by the state.”

The case argued that the inclusion of the phrase “established by the state” in the Affordable Care Act meant that the federal government is violating the law when it gives subsidies to consumers in 34 states that didn’t create their own health insurance marketplace.

Backers for ACA say that the intent of the law was never to exclude any states. Instead it was created to provide subsidies to residents of all U.S. states, whether or not that state created its own marketplace.

“Had Congress meant to limit tax credits to state exchanges, it likely would have done so in the definition of an ‘applicable taxpayer’ or in some other prominent manner,” Chief Justice John Roberts wrote for the Court. “It would not have used such a winding path of connect-the-dots provisions about the amount of the provision.”

Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan agreed.

Justices Antonin Scalia, Clarence Thomas, and Samuel Alito dissented, with Scalia saying from the bench that the majority ruling was “quite absurd.”

His dissent goes on to say that the law, as written, clearly limited tax subsidies to the small number of states that have their own health exchanges.

While SCOTUS’ decision to uphold the provision means that ACA survived another hurdle, it also ensured consumers and insurers alike avoided a doomsday scenario.

The Christian Science Monitor previously reported that a decision in favor of plaintiffs would likely result in a price surge leading nearly 6 million consumers to ditch their ACA enrollment. That would have, in turn, led insurers to shrink the marketplace by seeking increases in premiums.

Roberts wrote in the decision that the court rejected petitioners’ interpretation “because it would destabilize the individual insurance market in any state with a federal exchange and likely create the very ‘death spiral’ that Congress designed the Act to avoid.”

Shortly after SCOTUS handed down its decision, President Barack Obama held a press conference lauding the Court’s ruling that reaffirmed the administration desire five years ago to make health care a right for all Americans.

“This morning, the Court upheld a critical part of this law -– the part that’s made it easier for Americans to afford health insurance regardless of where you live,” he said. “If the partisan challenge to this law had succeeded, millions of Americans would have had thousands of dollars’ worth of tax credits taken from them. For many, insurance would have become unaffordable again. Many would have become uninsured again. Ultimately, everyone’s premiums could have gone up. America would have gone backwards. And that’s not what we do. That’s not what America does. We move forward.”

While the most recent hurdle is behind ACA, Obama says there is still work to be done to make sure American’s are obtaining their new rights.

“We’ll keep working to provide consumers with all the tools you need to make informed choices about your care,” he continued. “We’ll keep working to increase the use of preventive care that avoids bigger problems down the road. We’ll keep working to boost the steadily improving quality of care in hospitals, and bring down costs even lower, make the system work even better.”

Consumer advocates were quick to applaud the Court’s decision.

Marta Tellado, president and CEO of Consumer Reports – which includes advocacy arm Consumers Union – called the decision a “huge victory for consumers across the country.”

“Millions of Americans who were finally able to access and afford health insurance now have some peace of mind,” she said in a statement. “They know the coverage they depend on to get the care they need and deserve is secure – regardless of where they live.”

Today’s decision sets the ground for an even stronger national health care system “by focusing efforts on issues like improving affordability, transparency and value,” she continued.

Millions of consumers who purchased healthcare through the Affordable Care Act’s national exchange can continue to receive tax subsidies as the Supreme Court of the United States upheld a key provision of the Act.

The King v. Burwell case argued that the inclusion of the phrase “established by the state” in the Affordable Care Act meant that the federal government is violating the law when it gives subsidies to consumers in 34 states that didn’t create their own health insurance marketplace.

More to come on the Court’s decision [PDF].

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