Supreme Court upholds federal Obamacare subsidies
June 25, 2015
The U.S. Supreme Court Thursday ruled Thursday in a 6-3 vote that federal subsidies for federally-run exchanges — including Alaska’s — are legal.
Wikimedia Commons photo
WASHINGTON — Federal subsidies for federally-run health care markets — like Alaska’s — are legal, the Supreme Court ruled Thursday.
Had the court had ruled otherwise, more than 16,000 people in Alaska would have seen their premiums go up an estimated 520 percent.
In a 6-3 vote in King v. Burwell, the Supreme Court said that Affordable Care Act insurance subsidies are available to all states. Sixteen states and the District of Columbia have established their own exchanges. The remaining 34 states have elected to let federal government, through the Department of Health and Human Services, do it for them.
The case hinges on the interpretation of Section 36B of the act. Four plaintiffs from Virginia argued the section is worded in a way that does not allow federal subsidies for federally-implemented marketplaces. HHS interpreted the law differently, allowing subsidies in exchanges in all states, including those with federally-run programs.
A ruling backing the plaintiffs’ interpretation would have undoubtedly upended the program, resulting in massive boosts to health insurance premiums in 34 states. A 520 percent increase in premium costs projected for Alaska would have been second only to Mississippi.
But instead the court sided with the Obama administration’s interpretation, in an opinion penned by Chief Justice John Roberts. Thursday’s ruling marks a second major Supreme Court win for the administration since the Affordable Care Act was passed in 2010.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter,” Roberts wrote.
“The tax credits are among the Act’s key reforms, involving billions of dollars in spending each year and affecting the price of health insurance for millions of people. Whether those credits are available on Federal Exchanges is thus a question of deep ‘economic and political significance’ that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly.”
Roberts led the majority, which included Justices Anthony Kennedy, Ruth Bader Ginsberg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.
Justice Antonin Scalia wrote a dissenting opinion; he was joined by Clarence Thomas and Samuel Alito.
Scalia’s often scathing dissent argued that the majority bent over backwards to uphold the Affordable Care Act, resorting to “interpretive jiggery-pokery” despite an “absurd” reading of the law.
“We should start calling this law SCOTUScare,” Scalia wrote.
The question presented — whether the law explicitly allows for subsidies for federally-established exchanges — has an answer “so obvious there would hardly be a need for the Supreme Court to hear a case about it,” Scalia wrote.
The government should lose, but that would undermine “the overriding principle of the present Court: The Affordable Care Act must be saved,” he said.
Some Alaska officials were pleased with the ruling. “We applaud the court’s decision, which will allow thousands of Alaskans to continue to receive affordable health care,” said Department of Health and Social Services Commissioner Valerie Davidson.
Lori Wing-Heier director of Alaska’s Division of Insurance said the state is “relieved that the Supreme Court’s ruling safeguards thousands of Alaskans’ access to affordable health care insurance.”
But Alaska’s Congressional delegation sided with Scalia.
“From its inception, ObamaCare has been a catastrophe” and a “disaster for Alaska,” Sen. Dan Sullivan said. Costs are high and rising higher in Alaska, among other problems, he said. Sullivan said he is “extremely disappointed” with the decision and remains committed to repealing and replacing the law.
“From day one,” the law “has been a steady stream of mistakes, glitches and broken promises,” Sen. Lisa Murkowski said. “All today’s ruling means is that over 16,000 Alaskans who did everything the law required won’t be punished for the shortcomings of this unworkable policy.”
“I stand ready to work with anyone on either side of the aisle to deliver true health care reform that cuts costs, increases the availability of care, doesn’t hurt small businesses or their employees, and best serves a high-risk, high cost state like Alaska,” she said.
“Today’s ruling doesn’t change the fact that the Affordable Care Act is fundamentally broken,” said Rep. Don Young. “I will continue to work with my colleagues to repeal this law and replace it with patient-centered reforms that allow for freedom and flexibility. “
But Obama is confident in the law’s staying power.
“After multiple challenges to this law before the Supreme Court, the Affordable Court Act is here to stay,” President Barack Obama said in the White House Rose Garden following the ruling Thursday. If the court challenge had succeeded, millions of Americans would have lost thousands of dollars in tax credits and seen their health insurance premiums go up, Obama said. “America would have gone backwards.”
In Alaska, 16,583 people were at risk of losing subsidies that keep insurance premiums down. That’s the second lowest number of individual among the 34 federally-run exchanges. But Alaska’s federal exchange receives the nation’s highest rate of tax dollars per person, and nearly $9 million in tax dollars a month, according to the Kaiser Family Foundation — money it would’ve lost had the court ruled against the subsidies.
Such a ruling would’ve upended subsidies for health care in states with federally-run exchanges across the nation, observers predicted. With premiums once again extremely high, healthy people would opt out, leaving only those with high health care costs enrolled. The federally-run exchanges would have gone into a downward spiral practically overnight.
Instead, the court’s ruling, the second time it’d upheld major portions of the 2010 law, further entrenches the Affordable Care Act.
Five years in, the law is here to stay, Obama declared. “This is not an abstract thing anymore. This is not a set of political talking points. This is reality.”
“This was a good day for America. Let’s get back to work,” Obama said before stepping away from the podium and heading back to the West Wing of the White House.