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Supreme Court Upholds ACA Subsidies

In a sweeping ruling, United State Supreme Court on June 25 ruled against a challenge to subsidies under the Patient Protection and Affordable Care Act...
July 1, 2015

In a sweeping ruling, United State Supreme Court on June 25 ruled against a challenge to subsidies under the Patient Protection and Affordable Care Act (ACA). In a 6-3 decision in King v. Burwell, the Court found in favor of the Obama Administration. This means that individuals in every state will continue to be eligible to receive tax credits from the federal government to offset the cost of health insurance purchased from a healthcare exchange.

"This decision means the health insurance marketplace will continue to operate as it is currently constituted. It will be business as usual" said PIA National Executive Vice President & CEO Mike Becker. "As always, PIA will remain in the forefront of advocacy on behalf of PIA members, who remain fully committed to providing their clients with professional advice and choices regarding their health insurance needs."

What It Means to Agents: The decision means there will be no change in how the ACA currently operates. However, the scope and language of the Court's decision could make it difficult for future challenges to the ACA subsidies. Back to Top

Individuals in all states can continue to receive tax credits to purchase health insurance on a health exchange; effectively, what was permitted before the decision is still permitted. However, the Court's opinion is a significant win for the Obama Administration, in that it broadly solidifies the legal validity of the ACA itself. While legislative proposals may amend or eliminate the law in the future, it is unlikely the major provisions of the ACA will succumb to a legal challenge in the near future. In addition, the reasoning and strong language of the opinion will likely make it difficult for a subsequent administration to reverse any tax credits available in federally-facilitated exchange (FFE) states.

Shortly after the decision, PIA distributed this summary and analysis by PIA National Counsel and Director of Regulatory Affairs Jennifer M. Webb.

ACA Subsidies Upheld (National Underwriter 6/25) (PIA comments)
Insurance Industry Seeks to Make ACA Work (BestNews 6/26/15) (PIA comments)

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