In a historic 6-3 decision, the Supreme Court today upheld that the federal tax subsidies available to Americans who purchase health insurance through the Federal Health Insurance Marketplace (Federal Marketplace) are legal under the Affordable Care Act (ACA). This ruling brings closure to the most recent challenge to the ACA.
In King v. Burwell, the Court ruled that tax credits will remain available for individuals who purchase health insurance through the Federal Marketplace. Challengers had argued that tax credits were only available to individuals who purchased health insurance in one of the 17 jurisdictions with state-based Marketplaces.
In reaching its landmark decision, the Court focused on the underlying tenets of health insurance reform, the impact the outcome would have on the individual insurance market, and the ACA as a whole.
“The Court admitted that parts of the law were ambiguous, but that the law was to be read as a whole rather than in its isolated parts,” said attorney Jonathan Raven, Chair of Fraser Trebilcock’s Health Care Law Department. “When it did so, it found the intent of congress clear, despite sloppy drafting.”
The Court noted that without subsidizing taxpayers who use the Federal Exchange, the entire national framework of the ACA would fail, resulting in an economic “death spiral”.
The Court determined that “inartful drafting” could not overcome Congress’ clear intent to create a system to provide affordable health insurance to all Americans. The Court explained that numerous provisions of the ACA supported the conclusion that Congress intended state-based Marketplaces and the Federal Marketplace to be the same.
Fraser Trebilcock’s team of Health Care and Employee Benefits Attorneys will continue to offer additional insight and analysis of the Court’s historic opinion. Media inquiries can be directed to Fraser Trebilcock Marketing Director, Julie Holton at 517.377.0865.