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Michael Petruzzelli

, National Council for Behavioral Health

Supreme Court to Hear Case on Health Insurance Subsidies in Federal Marketplace

November 12, 2014 | Health Insurance Exchanges | Comments
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On Friday, the Supreme Court agreed to hear a case challenging the legality of federal financial assistance for consumers who purchase health insurance in states that opted not to set up their own health insurance exchanges. The appeal targets a technical inconsistency in the law that states that this financial assistance is available only to consumers in states that set up and run their own exchanges. If the federal subsidies are found to be against the terms of the law, consumers in 36 states would lose federal assistance for their insurance plans, potentially making plans unaffordable to millions.

The Supreme Court moved to hear the case, King v. Burwell, after conflicting decisions regarding the issue were made in lower courts over the last four months.  In July, two federal appeals courts issued conflicting decisions on whether the Affordable Care Act (ACA) allowed for the federal government to offer tax credits for plans run on federal exchanges. In September, a third court weighed in on the legality of the subsidies, ruling that subsidies cannot go to consumers who obtained their health coverage through the federal insurance marketplace.

While the architects of the law agree that the subsidies were meant to be accessible to all, the ongoing political controversy surrounding the ACA has made it almost impossible for Congress to reopen and address technical changes like this one. If the federal subsidies are found to be against the terms of the law, it could make health insurance unaffordable to more than 7 million Americans who relied on the subsidies to purchase insurance in states that did not run their own exchanges. Such a decision would come as another major blow to the Affordable Care Act.

The Supreme Court is set to hear the case sometime in the spring and make a ruling by the end of June. Some states are already preparing alternatives should the Supreme Court rule to end federal subsidies to consumers who purchase insurance on the federal exchanges. Be sure to stay tuned to the Capitol Connector for more policy news.