2015-06-25 17:11:04 UTC

Supreme Court Upholds Affordable Care Act Subsidies

June 25, 2015

In a six to three ruling, the court decided that subsidies will continue to be available for patients in both state and federal exchanges.

This morning, the U.S. Supreme Court issued a long-awaited ruling in a case challenging the ability of the federal government to administer the health insurance subsidies provided by the Affordable Care Act (ACA). In a six to three ruling on King v. Burwell, the court upheld a decision from the 4th Circuit Court of Appeals that affirmed the ability of the IRS to provide the subsidies to individuals enrolled in both state-based health insurance exchanges and the federal exchange established to provide access to coverage for those living in states that chose not to act.

The King v. Burwell case represented a major legal hurdle that, for now, cements that status of the ACA and ensures that subsidies will continue to be available for patients in both state and federal exchanges. AGA will continue to work with Congress to make improvements to the law, including the repeal of the IPAB and the medical device tax, and work with the agencies to ensure the current aspects of the law do not result in barriers to access to specialty care.

The plaintiffs in the case, four individuals living in Virginia, argued that language included in the ACA specifically limited the subsidies to those living in states that established an exchange, meaning that subsidies could not be provided via the federal exchange. Proponents of the ACA argued that eliminating the subsidies would cause millions of patients to lose health insurance coverage due to inability to pay.

In the decision, the court ruled that the ACA language was ambiguous and open to interpretation based on considerations such as practical implications of the law. The court then noted that eliminating the subsidies 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.” In the opinion written by Chief Justice John Roberts, the majority found that it would be implausible to assume that Congress meant to limit the subsidies to state exchanges because doing so would counteract the purpose of the ACA and lead to a “calamitous result that Congress plainly meant to avoid.”

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