In a historic 6-3 decision, the Supreme Court ruled today that the federal tax subsidies available to Americans who purchase health insurance through the Federal Health Insurance Marketplace (“Federal Marketplace”) are legal under the Affordable Care Act (“ACA”). This ruling brings closure to the most recent challenge to the ACA.
In King v. Burwell, Obamacare challengers argued that tax credits were only available to individuals who purchased health insurance in one of the 17 jurisdictions with state-based Marketplaces because the ACA only allowed for tax subsidies in “an Exchange established by the State”. The Court disagreed and held that tax credits will remain available for individuals who purchase health insurance through the Federal Marketplace.
In reaching its landmark decision, the Court focused on the underlying tenants of health insurance reform, the impact the outcome would have on the individual insurance market, and the ACA as a whole. At bottom, the Court determined that an example of “inartful drafting” could not overcome Congress’ clear intent to create a system to provide affordable health insurance to all Americans. The Court explained that numerous provisions of the ACA supported the conclusion that Congress intended state-based Marketplaces and the Federal Marketplace to be the same. The Court noted that to reach a different conclusion would not make sense. Furthermore, eliminating tax subsidies through the Federal Marketplace would destabilize the individual insurance markets in the 34 states that use the Federal Marketplace and likely create the very “death spirals” that Congress designed the ACA to avoid. Ultimately, the Court concluded that it was implausible that Congress meant the ACA to operate in this manner.
To find out more about the Supreme Court’s decision and the impact the Affordable Care Act has on health care and your business, contact attorney Michael James at firstname.lastname@example.org, 810-936-4040 or www.michaeljameslaw.com. Michael James provides representation and counseling related to all facets of business enterprise and health care matters.
© 2015 Michael P. James, J.D., M.B.A., CSSGB