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Northwest OH Legal Blog

Thursday, June 25, 2015

Supreme Court Upholds Subsidies Under Affordable Care Act In Federal Exchange

By a vote of 6 to 3 the United States Supreme Court has upheld the availability of tax subsidies for people enrolled in health insurance through the federal exchange under the Affordable Care Act. The case is King v. Burwell. The challengers argued that the words “established by the state” meant that the subsidies were available only to people enrolled through a state run exchange.  Most states are operating under the federal exchange.  A ruling for the challengers would have taken subsidies away from all those receiving subsidies through the federal exchange and would have destabilized insurance markets in states operating with the federal exchange.

Chief Justice Roberts wrote for the Court and was joined by Justices Kennedy, Kagan, Ginsburg and Sotomayor.  Justice Scalia wrote the dissent and was joined by Justice Thomas and Alito.  Although Justice Roberts characterized the wording of the Act as ‘inartful,” he also noted “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”

The Court said that it was following the “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme” The Court found numerous other provisions in the law which would not make sense if the interpretation offered by the challengers was accepted. Reading the disputed wording in context of the statute as whole, the Court found that the only logical interpretation was that the subsidies are available under either a state or federal exchange.

In a colorful dissent Justice Scalia called the majority’s opinion as “absurd” and characterized it as “pure applesauce.” However, the Court noted that “the words of a statute must be read in their context and with view to the place in the overall statutory scheme” and upheld the availability of the tax subsidies in all exchanges, whether federal or state.

 


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