Supreme Court Upholds the Refundable Tax Credits/Premium Subsidies For Federal Exchanges

June 25, 2015

In a 6-3 decision authored by Chief Justice Roberts, the Supreme Court upheld the premium assistance provisions of the Affordable Care Act for federally operated Exchanges. The court introduced the issues at stake as follows: “the Patient Protection and Affordable Care Act adopts a series of interlocking reforms to expand coverage in the individual health insurance market. First, the Act bars insurers from taking a person’s health into account when deciding whether to sell health insurance or how much to charge. Second, the Act generally requires each person to maintain insurance coverage or make a payment to the Internal Revenue Service. And third, the Act gives tax credits to certain people to make health insurance more affordable…. This case is about whether the Act’s interlocking reforms apply equally in each state no matter who establishes the State’s Exchange” and concluded “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible we must interpret the Act in a way that is consistent with the former and avoids the latter. Section 36B (refundable tax credits in federal Exchanges) can fairly be read consistent with what we see as Congress’ plan and that is the reading we adopt.” 576 US — (2015)

Document-1-page001In dissent, Justice Scalia was outraged and characterized the majority’s opinion among other things as “apple sauce” and “jiggery pokery” and concluded “perhaps the Patient Protection and Affordable Care Act will attain the enduring status of the Social Security Act and the Taft Hartley Act; perhaps not… the cases will publish forever the discouraging truth that the Supreme Court favors some laws over others and is prepared to do whatever it takes to uphold and assist its favorites.”

Phillip Bump, writing in today’s Washington Post notes “Whether or not Republican politicians consider Thursday’s Supreme Court ruling a negative for them is open to interpretation. The 2016 candidates have railed against it in their press releases, but deep down inside, it’s hard to believe that they wanted to deal with the fallout of the nuclear detonation that a ruling against ObamaCare would have been. They still have their political cudgel and they don’t have to clean up a mess. Win-win. And for Republican voters the win is even clearer…. About 1.8 million people in federal exchanges live in counties that voted for Obama. About 4.5 million live in counties that voted for Mitt Romney”.

Lena Sun and Robert Gebelhoff writing in today’s Washington Post interviewed consumers enrolled in federal Exchanges. “Ida Sievers (of South Dakota) who was diagnosed with leukemia last fall, had been praying that she wouldn’t lose the $620 a month government subsidy for her health insurance, so she was delighted Thursday … ‘thank God, Hallelujah, that is so awesome – Oh man! I’m so happy. I’ve been so stressed about it and worried, just every day. I’ve been talking to my husband what are we going to do honey? And he just says have faith honey, it’s going to be okay. ’”

“Mary Kitchens, who lives near San Antonio Texas is paying less than $100 a month for her subsidized coverage. She began crying when informed of the decision. ‘I don’t even have words’ said Kitchens who was diagnosed with multiple sclerosis in 2009. ‘It’s amazing, it’s amazing.’

“Kitchens, who works in marketing for a real estate firm is a single mom with four children. The decision ‘means that I’ll have options in obtaining medication and treatment…. It means I won’t be a burden to my children. Without it, I felt so doomed. Without insurance, you succumb to the disease. And I don’t want to do that.’ Without it, her bill would have jumped to $500 to $600 a month.”

“Atlanta resident Ted Souris, 62, describes himself as an ‘archconservative’ who initially opposed the health law. He said her had mixed feelings about the ruling. He gets what he calls ‘a pretty hefty subsidy’ to buy insurance – he gets $460 and pays $115 for insurance. ‘I’m so against Obama and I hate that he has any kind of victory, but it’s nice that I don’t have to worry about affording health coverage.’”

“Tom Clark, of Waunakee Wis., who retired from his long time job at Canadian national Railway called the decision ‘a huge weight off my chest, a huge relief.’ In the months before coverage was available under the health law, he was cashing in on his pension fund to pay the $2,000 monthly premium for a plan that covered his wife, a diabetic who works as a clerk in a liquor store, and one of his two college-age sons. After the family signed up for coverage in December 2013, a subsidy reduced his monthly premium to about $580…. ‘If I had lost the subsidies, I don’t know what I would have done.”

Karen Tumulty interviewed strategists from both parties on the political impacts of the court’s decision for her article in today’s Washington Post. “Rick Wilson, a Florida based strategist for Republican candidates said he was relieved by the decisions which has given his party a reprieve from having to navigate these straits. ‘I’ve been telling clients for about a month now, listen, this is probably going to get passed, they’ll approve it, and you should not be freaked out by it, because otherwise you’re going to spend the next year and a half getting ads run against you where a weeping Hispanic woman looks at the camera and says ‘they took away my son’s health care. Now he’s dead.’ What I don’t want is a political environment where the next year and a half we’re in a ditch with people asking ‘what is your exact health care plan and then when we present one, it gets torn apart’… Anyone who thinks that’s a great political frame to put yourself in for 2016 hasn’t ever done an election.”


For ITUP’s analysis of King vs. Burwell click here.