By a vote of 6-3 on June 25, the U.S. Supreme Court upheld federal subsidies across the country, ruling the subsidies can be offered in both state and federal healthcare exchanges, or marketplaces.
The Affordable Care Act gave states the option to build their own healthcare marketplaces or use one operated by the federal government. In all, 34 states decided to rely on the federal exchange. More than 6 million low- to moderate-income Americans receive subsidies, according to the Department of Health and Human Services.
Proponents and opponents
But in the lawsuit, four Virginia residents claimed the subsidies are legal only in states that have established their own exchanges, but not in Virginia and other states that use a federal insurance marketplace. They base their argument on a line in the Affordable Care Act that says subsidies are for those buying insurance through an exchange “established by the state.” The Obama administration contends the line is being misread, and that the healthcare reform law clearly intends for subsidies to be used for insurance purchased through either a state or federal exchange.
The White House has maintained that in drafting and passing the ACA, Congress clearly intended to offer insurance subsidies to those participating in both the federal and state exchanges.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts wrote in the court’s majority opinion. “If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”
A ruling that went against the subsidies would have threatened the tax credits used by 6.4 million people. “Those credits are necessary for the federal exchanges to function like their state exchange counterparts and to avoid the type of calamitous result that Congress plainly meant to avoid,” Roberts wrote in the opinion.
Roberts was joined in the opinion by justices Stephen G. Breyer, Anthony M. Kennedy, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor. Justice Antonin Scalia filed the dissenting opinion, and was joined by justices Clarence Thomas and Samuel A. Alito Jr.
Proponents argued that governors and legislatures never were told they needed to set up state exchanges in order for their citizens to get tax credits, according to media reports. The issue was not discussed when the law was being drafted and should not be considered now that millions of people would be harmed, they said. Is his dissenting opinion, Scalia wrote, “The act that Congress passed makes tax credits available only on an ‘exchange established by the state.’ This court, however, concludes that this limitation would prevent the rest of the act from working as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare.”
The American Nurses Association, a “steadfast supporter of the 2010 healthcare reform law,” lauded the Supreme Court’s decision in a statement. “We are gratified that the Supreme Court ruling will avoid the loss of subsidies that have allowed millions of people to get healthy and stay healthy,” ANA President Pamela F. Cipriano, PhD, RN, NEA-BC, FAAN, said in the statement. “The Supreme Court has spoken. Now it’s time to finish the work of ensuring Americans get the healthcare they need by expanding Medicaid.”
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