BREAKING: Supreme Court upholds subsidies in King v. Burwell
Written by Lisa Schencker //June 25, 2015 //Modern Healthcare
Insurance premium subsidies will continue to flow to Americans in all states under the Affordable Care Act, the U.S. Supreme Court decided 6-3 in King v. Burwell on Thursday.
The justices sided with the Obama administration in the historic decision, saying the healthcare law allows Americans in all states—not just those that established their own exchanges—to receive the subsidies.
Chief Justice John Roberts and Justice Anthony Kennedy were the swing votes in the case, siding with the more liberal justices.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Roberts wrote in the opinion. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”
An estimated 6.4 million Americans receive the subsidies in the 34 states that don’t have their own exchanges, in many cases relying on them to afford their health insurance, according to HHS.
Many had worried a decision in the opposite direction would lead to a dramatic spike in the nation’s uninsured and the disintegration of the healthcare law itself.
The challengers in the case pointed to one part of the law that says subsidies are available only to those who enroll through an “exchange established by the state.” The federal government, however, argued that the law’s purpose is clear in allowing Americans in every state to be eligible for subsidies and that other parts of the law indicate that.
In siding with the Obama administration Thursday, the justices refused to consider the phrase “exchange established by the state” in isolation. Instead, they looked at the broader context and structure of the law.
“In this instance, the context and structure of the act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase,” Roberts wrote in the opinion.
He wrote the subsidies, “are necessary for the federal exchanges to function like their state exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”
The Internal Revenue Service has interpreted the law to allow subsidies in all states, but the four individual plaintiffs in the case said that interpretation was wrong. The Supreme Court, however, refused to entertain that idea in their opinion.
The justices declined to apply what’s known as the Chevron doctrine, an oft-cited precedent that says federal agencies must follow the letter of the law where the law is clear. Under the doctrine, if a law is ambiguous, courts must defer to a government agency’s reasonable interpretation of it.
The justices said in their opinion it’s extremely unlikely Congress would have delegated interpretation of the law to the IRS, so the Chevron doctrine wasn’t appropriate for this case.
“Had Congress wished to assign that question to an agency, it surely would have done so expressly … It is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort,” Roberts wrote in the opinion.
Last summer, a 4th U.S. Circuit Court of Appeals panel in Virginia unanimously ruled in favor of the administration in King v. Burwell, saying subsidies should be allowed in all 50 states.
Dissenting justices included Justices Antonin Scalia, Samuel Alito and Clarence Thomas.
Chip Kahn, CEO of the Federation of American Hospitals, called the decision “welcome news” in a statement Thursday.
“The decision secures healthcare coverage for millions of Americans,” Kahn wrote. “Protecting patient coverage provides peace of mind to so many and helps ensure their access to the needed care at the right time.”
Rich Umbdenstock, CEO of the American Hospital Association, called the decision a “significant victory.”
“In the short time the subsidies have been available, hard-working people who are sick, need care for chronic conditions, or want preventive care have been able to seek care more easily,” Umbdenstock said in the statement. “Most significantly, providing access to primary and preventive care helps improve the health and well-being of individuals, family and communities.”
The three dissenting justices, however, criticized the majority for performing “somersaults of statutory interpretation” in their dissent, written by Scalia.
Scalia said King v. Burwell, along with the last Supreme Court opinion over the ACA in 2012, “will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites.”
Scalia argued that the phrase “established by the state” is clear. Context matters, he said, but should be used as a tool for understanding laws, “not an excuse for rewriting them.” He added that the context of the ACA actually undermines the majority’s reading.
“Words no longer have meaning if an exchange that is not established by a state is ‘established by the state,’” Scalia wrote. “It is hard to come up with a clearer way to limit tax credits to state exchanges than to use the words ‘established by the state.’”
This article was originally posted on the Wall Street Journal. To view the original article, click here.
The post King v. Burwell Ruling in Favor of Subsidies in All States appeared first on CHMB Inc..