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Second Time in Three Years SCOTUS Hears Challenge to Obamacare

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Last week, the U.S. Supreme Court (SCOTUS) granted certiorari to the case of King v. Burwell, and will hear a new legal challenge regarding the use of the Affordable Care Act’s (ACA, also known as Obamacare) subsidies when purchasing healthcare insurance on the federal health insurance exchanges.

This is a very different challenge than that made to ACA in 2012, when SCOTUS upheld a key provision mandating a requirement that Americans buy health insurance or pay a penalty. In NFIB v. Sebelius, Chief Justice John Roberts stunned conservatives by throwing his vote in with the liberal justices by rejecting the constitutional challenge to the law. The Court voted 5-4 to uphold the mandate as a proper exercise of Congress’s power under the Taxing Clause.

Here, the Court will take up another part of the Act concerning subsidies (tax credits) granted to low and moderate income individuals and families. SCOTUS decided to review the D.C.Circuit Court of Appeals ruling in the King case that upheld an Obama administration decision to extend tax subsidies to those purchasing healthcare coverage through federally-facilitated exchanges. Challengers argue that the wording of the law limits subsidies to those purchasing coverage in states that established their own exchanges. The Obama administration maintains that the law is intended to provide subsidies to all, regardless of which exchange the purchase was made.

If the Court agrees with those challenging the interpretation of the Act, it will potentially nullify the employer mandate in states where the federal government operates the online marketplace. Any individual receiving tax credits in a federally-run exchange would cease receiving those credits. This would impact approximately 36 states and potentially millions of people.

We anticipate a ruling from SCOTUS by the end of June, 2015, and will keep our members posted on developments.

Hilary Atkins

Posted In: Legal

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