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Supreme Court Upholds Obamacare’s Federal Subsidies for Health Insurance

Supporters of Obamacare are celebrating today as the Supreme Court in King v. Burwell rejected a lawsuit against the Affordable Care Act (ACA). In a 6-3 decision, the Court held that the federal government may continue to subsidize health insurance in those states that have not set up their own exchanges.  

Under the ACA, states can decide to establish health insurance exchanges to provide subsidized coverage to their residents or to let the federal government create them. The ACA’s challengers argued that four words in the statute — “established by the state” — meant that only people who bought insurance in states with their own exchanges would be eligible for tax credits and other government assistance. The government responded that the intent of the law was to provide the subsidies for all lower-income Americans who sought coverage and that Congress did not intend to exclude millions of people from tax credits.  As a result, “an exchange established by the state” refers to both federal and state exchanges. 

In writing for the majority, Chief Justice Roberts ruled that the structure and context of the law supported the interpretation that subsidies should be available even for the federal exchange, “to avoid the type of calamitous result that Congress plainly meant to avoid.”

The ACA has withstood what is likely to be the last of many major legal challenges.

To read the full text of the ruling, click here.