The Supreme Court on June 25 ruled in the case of King v. Burwell, upholding a major provision of the Affordable Care Act. In a 6-3 decision, the court sided with Secretary of Health and Human Services Sylvia Burwell and the Obama administration, thereby protecting health insurance subsidies for more than 6 million Americans. The crux of the case was whether the wording of the Affordable Care Act (ACA) allows the federal government to provide health insurance tax subsidies to individuals in states with federally-run health insurance exchanges. The language of the ACA states that individuals can receive subsidies for health insurance if they purchase a plan offered through a health-exchange “established by the State.” Many states have not established their own health insurance exchanges, instead allowing the federal government to run their exchange. The plaintiffs in King v. Burwell argued that federally-run exchanges are not “established by the State,” and as a result, individuals in states with federally-run exchanges are not eligible for tax subsidies. In his majority opinion, Chief Justice John Roberts shot down this argument, highlighting the intent of the original lawmakers to maintain affordability in the insurance market. He pointed out that without subsidies, insurance would not be affordable in many states and the individual mandate provision of the ACA would be eroded. This would create a “death spiral” in the insurance market, leading to higher premiums and progressively lower enrollment. The argument can be summed up with the following excerpt from the majority opinion: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.” With their decision the Supreme Court maintains the status quo in health insurance markets, striking down the latest attempt by opponents of the ACA to challenge provisions of the law in court.
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