Supreme Court upholds subsidies in King v. Burwell

So what does this mean?

For those of you how haven’t been following this issue let me start with what this case was about.

When the Affordable Care Act was originally written, the thought was that all of the states would manage their own exchanges. In reality that is not what happened. There are currently 34 states who do not operate their own exchanges and rely on the federal exchange to provide coverage to their constituents.

Those who have been challenging the Affordable Care Act found a part of the law that would have completely undermined the intent of the Affordable Care Act. The part of the law that they challenged was that it was written that subsidies are only available to those who enrolled in a state exchange. According to them, those in the 34 states who enrolled in plans through the marketplace would not be eligible for the subsidies that made coverage affordable. It’s estimated that it would be about 6 Million people who could have been affected by this.

Today the Supreme court voted 6-3 to uphold the subsidies and the interpretation of the Internal Revenue Services that individuals in all 50 states should be able to access these subsidies.

Vote Breakdown:

Roberts filed the opinion with Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan joining

Scalia filed a dissenting opinion with Thomas and Alito joining

The decision was based on the fact that they had to read the law in context and not just plain language. It was determined that in context the words “an Exchange established by the State under [42 U. S. C. §18031]” is ambiguous. Due to the ambiguity, the Supreme Court had to look at the phrase in the greater context of the Act. They also found that other parts of the law would not make sense if this phrase was defined as plain language.

When looking at the greater context of the Act the Supreme Court had to reject the interpretation of the petitioners because “it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very “death spirals” that Congress designed the Act to avoid”.

It would have removed the subsidies from the states that didn’t operate their own exchanges and many of those individuals would have been exempt from the coverage requirement because the insurance would not have been affordable. These two facts would have also had a negative impact on the state exchanges as well since they would have struggled to operate in this environment.

So why should we care? Michigan is one those states that participated in the federal exchanges. As some of you know American Indian Health and Family services has played an important role in enrolling both tribal members and non-tribal members through the Marketplace and Healthy Michigan. If the Supreme Court had not upheld the subsidies, most of the individuals that we enrolled in the marketplace would no longer be able to afford coverage and would become uninsured again.

If you would like to read the filing please visit here