Obamacare Round Two: Court to Hear Subsidies Challenge

November 07, 2014 − by CIR − in Case Updates − Comments Off on Obamacare Round Two: Court to Hear Subsidies Challenge

The Supreme Court announced that it will hear King v. Burwell, a case challenging the Obama Administration’s claim that it may subsidize the cost of individual healthcare policies even in states that have not created state healthcare exchanges.  King is one of two cases in which CIR filed an amicus brief on behalf of several members of Congress arguing that the law creating Obamacare was clear: subsidies are available for individuals only in states that create exchanges.

Because only sixteen states created such exchanges, Obama officials set aside the plain words of the statute in order to offer subsidies in the other thirty-two states as well. The district court and the Fourth Circuit Court of Appeals both ruled in favor the Obama interpretation, claiming that the act as a whole showed that Congress did not intend to limit subsidies to states with exchanges.  If the Supreme Court reverses and holds the law to its plain language, Obamacare could not survive in its present form: without subsidies, many individuals could not afford the insurance and only the sickest would sign up, forcing premiums to increase further.  Alternatively, many states that do not now have state exchanges would have to quickly create them in order to enable their citizens to qualify for subsidized insurance.

The Court’s decision to take the case means that it will be decided during the current term, which ends on June 30, 2015.  Read Lyle Denniston’s post at SCOTUSblog about what is at stake.

Also a good read is CIR General Counsel Michael Rosman’s post in SCOTUSblog’s symposium on King. Rosman explains why the unusual haste with which the Affordable Care Act was passed is a reason to hold Congress to the plain meaning of the statute, not the other way around, as the government argues.  If the courts did not rely on the plain meaning, they would have to try to speculate what Congress would have done if the Democrats had not lost a filibuster-proof majority — an impossible task.

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