Ruling for Obamacare: Obamacare Subsidies

Published: June 25, 2015

Ruling for Obamacare: Obamacare Subsidies, The Supreme Court on Thursday upheld ObamaCare subsidies nationwide, in the second major court victory for President Obama on his signature health care law.

In a 6-3 decision, the court ruled that subsidies are valid even in states that did not set up their own insurance exchanges.

A ruling against the administration would have threatened subsidies worth millions in nearly three-dozen states and imperiled the program itself. For months, though, the administration said it had no back-up plans, confident the Supreme Court would rule in its favor.

With yet another challenge to ObamaCare now cleared away, Obama urged critics to move on.

“The Affordable Care Act is here to stay,” he declared in the Rose Garden.

But Republicans continued to blast the program, and vowed to keep up the fight. “ObamaCare is fundamentally broken, increasing health care costs for millions of Americans. Today’s ruling doesn’t change that fact,” House Speaker John Boehner said. “[W]e will continue our efforts to repeal the law and replace it with patient-centered solutions that meet the needs of seniors, small business owners, and middle-class families.”

The Supreme Court had previously upheld the law’s individual mandate in 2012, in a 5-4 decision. This time, the justices tackled the law’s tax credits and ruled that subsidies that 8.7 million people currently receive do not depend on where they live.

Chief Justice John Roberts, who was the key vote in 2012, again voted with his liberal colleagues in support of the law. Justice Anthony Kennedy, a dissenter in 2012, was part of the majority on Thursday.

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Roberts wrote in the majority opinion.

Conservative-leaning justices, though, issued a scathing dissent to the decision, referencing the several times the high court has had to rule on the health law.

“We should just start calling this law SCOTUScare,” Justice Antonin Scalia wrote, joined by Justices Clarence Thomas and Samuel Alito.

The challenge devised by opponents of the law centered on four words — established by the state — in the more than 900-page law. The passage technically said subsidies were for those exchanges established by the state.

The law’s opponents argued that the vast majority of people who now get help paying for their insurance premiums are, therefore, ineligible for their federal tax credits. That is because roughly three dozen states opted against creating their own health insurance marketplaces, or exchanges, and instead rely on the federal to help people find coverage if they don’t get insurance through their jobs or the government.

In the challengers’ view, the phrase “established by the state” demonstrated that subsidies were to be available only to people in states that set up their own exchanges. Those words cannot refer to exchanges established by the Health and Human Services Department, which oversees, the opponents argued.

But the majority opinion effectively said Congress intended the subsidies to be available for all.

“Had Congress meant to limit tax credits to State Exchanges, it likely would have done so in the definition of ‘applicable taxpayer’ or in some other prominent manner,” Roberts wrote. “In this instance, 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.”

He added: “Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”

Scalia wrote that if that’s the case, “words no longer have meaning.”


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