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High Court Will Settle Crucial ACA Subsidy Battle

Just one week after it appeared to postpone consideration, the U.S. Supreme Court on Friday agreed to decide whether tax credits are available to consumers shopping on the Affordable Care Act's federal marketplace, setting up a potential make-or-break case for the landmark law...
November 13, 2014

Just one week after it appeared to postpone consideration, the U.S. Supreme Court on Friday agreed to decide whether tax credits are available to consumers shopping on the Affordable Care Act's (ACA's) federal marketplace, setting up a potential make-or-break case for the landmark law. King v. Burwell seeks to prevent people in the 34 states using the federal insurance exchange from obtaining tax subsidies under Obamacare.

The case centers on a provision of ACA indicating that people qualify for tax credits when they purchase coverage through an online marketplace "established by the State." An Internal Revenue Service (IRS) rule says consumers can claim the tax credits regardless of where they live, which the Obama administration insists is consistent with the goal of the law to provide affordable health coverage to all Americans.

The challengers to subsidies for those who shop for insurance on a federal exchange have argued that those words limit the availability to the tax benefits solely to state-run exchanges. That argument failed in the U.S. Court of Appeals for the Fourth Circuit, in the ruling now under review. It was accepted in the U.S. Court of Appeals for the District of Columbia Circuit, but that ruling has now been set aside while the full D.C. Circuit reconsiders the issue. In deciding to hear the case, the Supreme Court granted review despite the fact that there is currently no split in federal appeals court rulings.

It will probably never be known if last week's election had any bearing on the Supreme Court's about-face in deciding to hear King v. Burwell. Experts say a decision against the subsidies would have far-reaching effects, possibly destabilizing insurance markets nationwide.

Court to Rule on Healthcare Subsidies (SCOTUSblog 11/7/14)

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