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Supreme Court Upholds Affordable Care Act Subsidies
The Supreme Court has upheld one of the main tenets of the Patient Protection and Affordable Care Act (PPACA), ruling 6-to-3 that millions of Americans are entitled to keep the tax subsidies that help them afford insurance.
Chief Justice John Roberts wrote the court’s majority opinion and was joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Roberts wrote, adding that nationwide availability of the credits is required to “avoid the type of calamitous result that Congress plainly meant to avoid.”
The ruling, the second case in which the justices have decided in favor of the PPACA, preserves benefits for an estimated 6.4 million Americans and deals a crippling blow to the law’s Republican opponents, who have attempted to undermine the Act since its passage in 2010.
Roberts wrote that although the conservative challengers’ arguments about the plain meaning of the statute were “strong,” the “context and structure of the act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.”
King v. Burwell centered on whether middle- and low-income adults who purchased health insurance through the federally run Healthcare.gov marketplace were entitled to subsidies based on the language of the PPACA, which states that tax credits are to be distributed only for marketplaces “established by the state.”
The law’s architects countered that subsidies were always meant to be distributed through both channels, and that the goal of the law was to cover all Americans. The Supreme Court agreed.
Conservative Justice Antonin Scalia took the rare step of reading a summary of his dissenting opinion from the bench. In his reading of the statute, “it is hard to come up with a reason to use these words other than the purpose of limiting credits to state exchanges,” Scalia said.
The current system will remain in place, with subsidies available in all 50 states. If the challengers had won, at least 6.4 million people in at least 34 states would have lost subsidies that help low- and moderate-income people afford private health insurance. The average subsidy is $272 per month.
The long-awaited ruling comes after the high court found in 2012, in National Federation of Independent Business v. Sebelius, that the so-called “individual mandate” –– the portion of the PPACA that requires Americans to buy health insurance or pay a penalty –– was constitutional.
Sources: Reuters; June 25, 2015; and U.S. News & World Report; June 25, 2015.