Supreme Court Upholds Subsidies in King v. Burwell Ruling

On Thursday, the Supreme Court handed down its long-awaited ruling in the King v. Burwell case.  At issue was whether or not the IRS could continue to extend tax-credit subsidies for health coverage purchased through exchanges established by the federal government under the Patient Protection and Affordable Care Act (because the legislation specified state-run exchanges only).  Had the Court ruled the other way, the ACA would have been seriously threatened, as 34 states have federally-run exchanges.  Connecticut would not have been affected directly, because we have a state-run health insurance marketplace.  But nationwide, over 6 million people would have lost tax credits in excess of 1.7 million dollars; on average across these states, premiums would have climbed close to 3-fold.

The legal decision, with Chief Justice Roberts writing for the 6-3 majority, turned on semantics and interpretation of the language of the ACA.  What did Congress intend?  Would they really want to withhold subsidies where states refused to set up their own exchanges, and federal marketplaces were required?  To what end – to punish the states?  The plaintiffs had an implausible story: that Congress intended only state exchanges, not a federal exchange, to receive subsidies in an effort to strong-arm the states into creating them.   The minority objectors (Scalia, Alito, Thomas) derided the loss of the meaning of language in a shrill response:  “Words no longer have meaning,” Scalia wrote, “if an Exchange that is not established by a State is ‘established by the State’.”  Justice Scalia would look to abandon common sense, as if Congress meant to undo everything the law was established to create in the first place, if only someone could find a linguistic technicality and bring it to light.

Thankfully, common sense prevailed on Thursday.

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