Topics
More on Policy and Legislation

Supreme court upholds Obamacare subsidies, votes 6-3 in King v. Burwell (UPDATED)

Vote preserves tax subsidies on health plans bought on federal exchanges.

Susan Morse, Managing Editor

Crowd reacts to King v. Burwell ruling in Washington D.C. <em>(<a href="https://twitter.com/KTLAMorningNews/status/614091475459153920/photo/1">Photo via KTLA 5</a>)</em>Crowd reacts to King v. Burwell ruling in Washington D.C. (Photo via KTLA 5)

The U.S. Supreme Court on Thursday upheld President Obama’s signature healthcare law in voting 6-3 against the plaintiffs in King v. Burwell.

Justices Samuel Alito, Clarence Thomas and Antonin Scalia voted in dissent.

Chief Justice John Roberts wrote the majority opinion.

HIMSS20 Digital

Learn on-demand, earn credit, find products and solutions. Get Started >>

The ruling means more than six million residents in the 34 states with federal exchanges can keep their tax subsidies for healthcare insurance under the Affordable Care Act.

[Also: Reactions to King v. Burwell -- Healthcare leaders back ruling]

The case centered around whether a line in the health law that required subsidies to be offered in plans bought via an "exchange established by the State" disqualified plans bought on federal exchanges.

"If the statutory language is plain, the Court must enforce it according to its terms. But oftentimes the meaning—or ambiguity—of certain words or phrases may only become evident when placed in context. So when deciding whether the language is plain, the Court must read the words 'in their context and with a view to their place in the overall statutory scheme,'" the ruling read.

Roberts also wrote that if tax subsidies were dropped in those states that set up state exchanges it would make the cost of buying insurance more than 8 percent of petitioners’ income, exempting them from the ACA’s coverage requirement.

“The tax credits are one of the Act’s key reforms and whether they are available on the Federal Exchange is a question of deep ‘economic and political significance’; had Congress wished to assign that question to an agency, it surely would have done so expressly. And it is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort.”

[Also: King v. Burwell ruling removes uncertainly for individual insurers]

Also, the ruling said "the argument that the phrase “established by the State” would be superfluous if Congress meant to extend tax credits to both State and Federal Exchanges is unpersuasive."

The case brought by Virginia resident David King and other plaintiffs claimed language in the Affordable Care Act allows only for tax subsidies in states that have set up their own exchanges. 

“With this case now behind us, we hope our country can move forward and continue strengthening our nation’s health care system," the American Medical Association said in a statement, adding that it was "relieved" by the decision.

Bill Melville, market analyst for Decision Resources Group, said the decision should bring a little stability to the market.

“By upholding the subsidies, the exchange markets won’t see major changes for 2016. This won’t be the last legal challenge to the law, but it will likely be the last big one," he said.

Alito has harsh words

In his scathing dissent, Scalia called “absurd the opinion that when the ACA says “Exchange established by the State” it means “established by the State or Federal government.”

"Context is a tool for understanding the terms of the law, not an excuse for rewriting them.” Scalia wrote, calling the Court’s interpretation of the law “jiggery-pokery” and its equating federal and state Exchanges as “pure applesauce.”

“In the meantime, this Court has no roving license …. to disregard clear language simply on the view that … Congress ‘must have intended’ something broader.”

“The Court’s revision of the law,” Scalia said, “authorizes the Internal Revenue Service to spend tens of billions of dollars every year in tax credits on federal Exchanges. It affects the price of insurance for millions of Americans. It diminishes the participation of the States in the implementation of the Act.”

Follow Healthcare Finance on Twitter and LinkedIn.

The Judiciary should have no influence over the purse, Scalia wrote, quoting Alexander Hamilton, the founder of the nation’s first financial system.

“We should start calling this law SCOTUScare,” Scalia wrote.

Obama celebrates the win

After multiple challenges to the law before the Supreme Court, the Affordable Care Act is here to stay,” said President Barack Obama in a speech following the ruling.

More than 16 million Americans have gained coverage under the ACA, resulting in the country’s lowest uninsured rate since records were kept, he said.

The president also linked the law to a reduction in hospital readmissions.

“It’s not a government takeover,” he said. “This generation of Americans chose to finish the job, to close the book on the history of tens of millions of Americans who had no hope for finding affordable healthcare,” he said.

More work needs to be done, specifically in the expansion of Medicaid to states that for political reasons have not adopted it, he said.

“Put politics aside and expand Medicaid,” Obama said.

Read the full ruling:

 

Twitter: @SusanMorseHFN