Supreme Court rules in favor of Administration in King v. Burwell

By Julie Barnes, Director of Health Policy | June 19, 2015

In a 21-page, straightforward decision, Chief Justice Roberts wrote the majority opinion to allow individuals to continue receiving subsidies to help pay for their health insurance premiums if they purchased their plans through one of the 34 exchanges established by the federal government.

In a huge win for the Administration, the Court, in a highly practical, 6-to-3 opinion (Roberts, Kennedy, Ginsburg, Breyer, Kagan, Sotomayor), acknowledged that the Affordable Care Act was poorly drafted but that Congress intended for subsidies to be available regardless of whether it was the state or federal governments that established the exchanges.

In King v. Burwell, the health law challengers argued that the federal exchange, Healthcare.gov, has no legal authority to distribute subsidies that help low- and middle-income Americans purchase coverage. A key section of the law says subsidies are available only when a state establishes an insurance exchange – leading to a question of whether the subsidies are available in the 34 states that rely on the federally-facilitated Healthcare.gov.

Citing several “friend of the court” briefs, particularly the two filed by America’s Health Insurance Plans and a bipartisan economist group, the Court demonstrated a strong desire to hand down a ruling that would not cause a “death spiral” for insurance markets. The Court went so far as to mention how many people would be unable to afford insurance without the subsidies and the resulting increase in insurance premium rates.

After conceding that the Affordable Care Act was inartfully drafted and not the product of “the type of care and deliberation that one might expect of such significant legislation,” the majority concluded that the availability of federal subsidies in every state are part of the overall intent of the law.

In its strongly-worded conclusion, the majority stated that "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them."

Justice Scalia wrote a lengthy dissent, calling the Court’s opinion an absurd reading of the law. Using “SCOTUS” for the first time in a Court decision, Justice Scalia wrote that we should start calling the Affordable Care Act “SCOTUScare.”

Experts believe that this case should put to rest the endless pipeline of ACA litigation, given the 6-to-3 opinion and with few Court justices retiring. At the very least, this case demonstrated that this is a practical Court that was fully aware of the economic impact of its decision.


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