On Friday, the US Supreme Court announced it will hear King v. Burwell, setting the stage for a decision from the high court that could significantly impact the full implementation of the Affordable Care Act (ACA).
The issue in King v. Burwell is whether the language of the ACA permits consumers to receive premium tax credits for premiums paid to participate in exchanges not operated by states. The ACA makes tax credits available to consumers who enroll “through an exchange established by the state.” States that have chosen not to operate their own insurance exchanges, however, rely on HealthCare.gov that is the federally-run exchanges portal. The disagreement is about whether the ACA language means Congress intended to limit such tax credits to state exchanges.
The Obama administration argues that the law’s clear intention was to offer tax credits and expand coverage to Americans in every state regardless of exchange logistics. Plaintiffs have vigorously defended their right not to be taxed without congressional authorization and urge that Congress did not intend to make tax credits available on HealthCare.gov, but only in states that set up their own insurance exchanges.
In July, the Fourth US Circuit Court of Appeals unanimously ruled in favor of the position advanced by the Obama administration, finding that federal regulators reasonably interpreted the ACA as allowing tax credits for shoppers on HealthCare.gov. The plaintiffs appealed to the US Supreme Court.
In a parallel case, Halbig v. Burwell, a panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled in a split decision that tax credits should not be available in states without their own exchanges. But that decision was vacated when the D.C. Circuit decided to hear the case en banc. Oral arguments for that case are scheduled to begin on December 17.
According to experts, a pro-plaintiff decision in King v. Burwell would leave many Americans who are now covered through HealthCare.gov unable to afford health insurance. This, in turn, would render the ACA’s individual mandate largely unenforceable, while also making the ACA’s consumer protections untenable, given that many healthier people would refuse to buy plans, leaving a sicker, and less profitable, population participating in the exchanges. For this reason, King v. Burwell could very well make or break the ACA, and in the process, could impact millions of Americans.