Health Care E-lert -- Supreme Court Rules that Affordable Care Act Law Allows Nationwide Tax Subsidies

On June 25, 2015, the Supreme Court ruled in King v. Burwell that the Affordable Care Act allows the federal government to provide nationwide subsidies to help lower-income individuals buy health insurance. Chief Justice John G. Roberts wrote the opinion for the six-justice majority. The decision affects about 6.4 million people in 34 states that use the federal healthcare marketplace.

In King, the issue presented to the Court was whether the Affordable Care Act tax credits were available in States that have a Federal Exchange. The entire cased turned on a brief passage that stated that Americans qualified for subsidies if they purchased insurance in an exchange "established by the State." Acknowledging the plaintiffs contentions that the language in the statute was ambiguous, Justice Roberts nevertheless said the plaintiffs’ interpretation of the law "would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress designed the Act to avoid." The Chief Justice went on to say "[i]s implausible that Congress meant the Act to operate in this manner. Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation. But those requirements only work when combined with the coverage requirement and the tax credits. So it stands to reason that Congress meant for those provisions to apply in every State as well."

Justice Antonin Scalia wrote the scathing dissent, calling the majority’s reasoning "quite absurd" and "interpretive jiggery-pokery." Justices Samuel Alito and Clarence Thomas joined the dissent.

The decision maintains the way more than 1 million Floridians buy and pay for insurance through HealthCare.gov. According to NPR and Kaiser Health News, Florida residents with subsidies earned an average $294 in tax credits in 2015. A loss of that credit would have increased the cost of their monthly premium by 359 percent.