The Supreme Court of the United States ruled in favor of the Patient Protection and Affordable Care Act’s (ACA) tax subsidies in States that utilize healthcare.gov rather than a State operated health insurance market. The dispute in the case of King v. Burwell was viewed by many observers and healthcare professionals as one that could have crippled the ACA had the Court ruled differently.
At the center of the dispute in King were the words “established by the State.” According to a strict reading of the ACA, it appeared that the tax credits, so important to helping people with income below a certain level attain health insurance, were only available in States that had established their own health insurance exchange. The Plaintiffs, four individuals from Virginia, argued that the ACA was written to encourage States to develop their own health insurance exchanges and that the exclusion of tax credits for States that refused to do so was intentional. The Defendants, Federal Government representatives from Health and Human Services, the Department of the Treasury, and the Internal Revenue Service, argued a strict interpretation should not be adopted because it would result in absurd results when applied in other parts of the ACA.
In a 6-3 decision, the Court agreed with the Defendants. The Court mentioned that although the plain language was clear, a strict reading was untenable when considering the structure and function of the ACA as a whole.
In a strongly worded dissent, Justice Scalia, joined by Justices Thomas and Alito, noted that the decision effectively means that the plain language of a statute can be molded to the whims of the Court. “Words no longer have meaning if an [e]xchange that is not established by a State is ‘established by the state,’” wrote Justice Scalia (emphasis in original). The dissent goes on to note that the Court has effectively rewritten the law and that perhaps the ACA should be known as “SCOTUScare,” rather than “Obamacare,” as it is currently known to some.
This has been a momentous session for the Supreme Court. Just one day after its ruling in King v. Burwell, the Court mandated that all states allow and acknowledge same sex marriage in the case of Obergefell v. Hodges.
Corporate entities should follow the political path of the ACA as it progresses. While many of the constitutional challenges to the ACA have now been resolved, more than one of the presidential candidates have mentioned seeking to completely repeal the ACA if they are elected. For more information on the Affordable Care Act, or other healthcare, labor, and employment issues, please contact Adam B. Kuenning with Erickson | Sederstrom.