The Supreme Court ruled today on King v. Burwell in favor of the Obama Administration. At issue in this case were the federal subsidies with the Affordable Care Act, also known as Obamacare. The Court ruled the subsidies to be legal in a 6-3 ruling.
Chief Justice John Roberts wrote the Court’s opinion and was joined by Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, Anthony Kennedy, and Sonia Sotomayer. Justice Antonin Scalia wrote the dissent, joined by Samuel Alito and Clarence Thomas. The division is similar to that of National Federation of Independent Business v. Sebelius, except that typical swing vote Kennedy joined with Roberts and the liberal wing of the Court.
Four words were at the heart of this lawsuit. The words, “established by the state,” led to the perception that the subsidies would only apply to state-run exchanges. If the Court ruled in favor of King, it would have ended the subsidies for the federal marketplace. Thirty-four states utilize the federal marketplace or a partnership marketplace.
The removal of the subsides would have dealt a fatal blow to Obamacare, as the underlying math is dependent upon the individual mandate and healthy people buying coverage. Those healthy people buying coverage, which is subsidized, helps control insurance costs and keep them low. If the subsidies are removed, however, it would be in the financial interest of some to not purchase coverage. If the sick continued to purchase coverage at their previous patterns, insurance rates would skyrocket.
Chief Justice Roberts looked at the whole law and determined that the interpretation of the four words had to be considered with the whole intent of the law. He wrote, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”