In a ruling handed down on Thursday morning, the U.S. Supreme Court upheld a key tenet of the Affordable Care Act.
The court’s 6-3 decision in the case of King v. Burwell held that health plans sold through the federally run insurance exchange, Healthcare.gov, are eligible for government subsidies. If the subsidies were taken away, the cost of the health plans would have become unaffordable for millions of middle- and low-income Americans, who are legally mandated to purchase health insurance under the law.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts wrote in the majority opinion.
If you’re wondering what this means for your own health insurance, the answer is that nothing is going to change.
The Affordable Care Act, commonly known as Obamacare, gave individual states the option of operating their own healthcare exchanges or opting into one run by the federal government. As Vox notes, there are currently 34 states utilizing Healthcare.gov. Approximately 87 percent of customers on those exchanges have their health plans in some way subsidized. The average monthly subsidy for a Healthcare.gov plan is around $264, more than twice the price tag for what customers with even the most expensive plans offered on the exchange are paying out of pocket.
As a result, if the decision had fallen the other way, the price people paid for most plans on the exchange would have more than doubled.
The heart of the case rested on the meaning of a few words inside the text of the law itself. While the Affordable Care Act permits individual states to use an exchange coordinated by the federal government, another clause in the bill subsidies should go to exchanges “established by the state[s].” Even though the bill never explicitly precluded the federal exchange from subsidization, the question was whether the language of the bill precluded the exchange run by the federal government from receiving subsidies.
In the dissenting opinion, Justice Antonin Scalia called the majority’s ruling “absurd,” and he argues that the court is “[rewriting] the law to make tax credits available everywhere.”
“We should start calling this law SCOTUScare,” Scalia wrote.
The six justices in the majority found that, while the wording of the subsidy provision was murky, its intent was considerably less so.
The lead plaintiff in the case is a 64-year Virginia resident named David King. King argued that, due to his income as a limo driver being low enough to qualify for a subsidy, it was that very subsidy that was requiring him to buy health insurance. The Affordable Care Act has a provision exempting people from having to comply with the individual mandate if health insurance is unaffordable for them.
King told the New York Times earlier this month he wasn’t personally concerned about what would happen to his own health care if the subsidies were overturned. As a Vietnam veteran, he already receives health care through the Department of Veterans Affairs.
The named defendant in the case is Health and Human Services Secretary Sylvia Burwell.
The ruling is a major victory for the Obama administration. The passage of the Affordable Care Act is the president’s highest-profile domestic policy achievement. The elimination of the subsidies would have thrown the entire system into chaos.
This is the second time the Supreme Court has taken Obamacare to the brink only to end up ultimately saving the law’s central tenets. In 2012, that court declared the legislation’s individual mandate, the provision that all Americans were required to buy health insurance, to be constitutional because the requirement effectively functioned like the imposition of the new tax.
STATEMENT BY THE PRESIDENT on King v. Burwell: pic.twitter.com/am4KxKxTfv— Eric Geller (@ericgeller) June 25, 2015
Photo by Center for American Progress Action Fund/Wikimedia Commons (CC BY-SA 2.0) (CC BY 2.0) | Remix by Max Fleishman