Supreme Court Sides with the Obama Administration in King v. Burwell

Posted by Colleen Weston on Jun 26, 2015 11:34:00 AM


Yesterday morning, the Supreme Court upheld the federal government’s authority to deliver health insurance subsidies through a federal exchange. The ruling protects a core provision of the Affordable Care Act and subsidies for 6.4 million Americans in the 34 states that currently rely on 

Chief Justice Roberts wrote the majority opinion for the Court; Justices Kennedy, Ginsburg, Breyer, Sotomayor and Kagan joined that opinion. The Court first concluded that the text of the Act is ambiguous, noting in an understatement that “the Act does not reflect the type of care and deliberation that one might expect of such significant legislation.”  The Court found, however, that the government is not entitled to deference when interpreting such a core statutory provision.

The Court nevertheless ruled that the subsidies should be available on both state and federal exchanges because the structure of the Act demands it. To hold otherwise, the Court found based in part on prior State experiences, would create insurance market “death spirals” in states with federal exchanges. According to the majority, “Congress passed the Affordable Care Act to improve health insurance markets, not destroy them [and] we must interpret the Act in a way that is consistent with the former and avoids the latter.”  

The ruling is a major victory for the Administration and could be the final chance to significantly dismantle the ACA. While an alternative ruling would have advanced Congressional efforts to dismantle the law, the political backlash could have been significant for Congressional leadership as nearly 6.4 million Americans would risk losing the coverage in 34 states. This ruling allows to continue providing federal subsidies and temporarily takes the future of those benefits off the political table. 

The challenge to the legality of the subsidies created a lot of turmoil and angst for the legislative prospects of other ACA reforms pursued by those opposing the law. Groups such as the Council of Insurance Agents and Brokers are actively advocating for the repeal of the Cadillac Tax, regulatory implementation of wellness incentives as specifically prescribed in the ACA, easing of employer reporting requirements and clarity on non-discrimination rules. 


Photo Credit: Ted Eytan, SCOTUS ACA 2015 57967

Topics: Affordable Care Act, benchmarking benefits, burwell, supreme court, federal exchange, subsidies