By a 6–3 ruling, the Supreme Court decided on Thursday to avoid a major disruption to the insurance market by leaving in place the Affordable Care Act’s current tax subsidies. The decision preserves financial assistance for the Americans purchasing insurance plans through Obamacare’s federally-run marketplaces, effectively maintaining affordable access to health care for millions of people whose coverage was thrown into question by the King v. Burwell case.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” the majority opinion concluded.
The closely watched case represents the second time that the Affordable Care Act has withstood a major constitutional challenge. In 2012, the Roberts Court upheld the law’s individual mandate, which paved the way for Obamacare to be implemented on a state level.
Under Obamacare, which marked its five-year anniversary this past spring, the national uninsurance rate has plummeted to record lows. If the justices had ruled in favor of the plaintiffs in King, however, much of that progress would have unraveled.
Based on one line in the law — which suggests that tax subsidies are available to people who are enrolled in a health plan purchased “through an Exchange established by the State” — the King v. Burwell plaintiffs sought to invalidate the financial assistance available to help Americans purchase insurance in 34 states across the country. If they had been successful, an estimated 13 million people would have suddenly been forced to pay for the entire cost of their health care premiums, sending the insurance market into chaos. Experts predicted that millions of consumers would have been unable to afford to the cost of their plans, contributing to a “death spiral” that would make insurance more expensive for everyone.
The Supreme Court’s ruling is welcome news to everyone from health care advocates to state lawmakers to presidential candidates, all of whom were scrambling to figure out what would happen next if Obamacare’s tax subsidies were struck down in most of the country. There has been little evidence that state and federal politicians had much of a back-up plan.