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  • Washington Highlights

    Supreme Court Hears Oral Arguments in ACA Subsidies Case

    Ivy Baer, Senior Director and Regulatory Counsel

    The U.S. Supreme Court March 4 heard oral arguments in King v. Burwell, a case challenging the availability of tax subsidies for people purchasing health insurance through exchanges facilitated by the federal government. The AAMC submitted a Jan. 28 amicus brief  supporting the availability of tax subsidies [see Washington Highlights, Jan. 30].

    Authorized by the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) the subsidies under scrutiny reduce the cost of exchange offered plans for those with household incomes of 100 to 400 percent of the federal poverty level.

    The argument challenges the Internal Revenue Services’(IRS) interpretation of the ACA’s premium tax credit provision. Currently the IRS grants subsidies to citizens in states that have established an exchange as well as citizens in the 34 states with federally facilitated exchanges. Petitioners argue that, based on one provision of the ACA, subsidies are not available to citizens living in a state with a federally facilitated exchange.

    In a packed courtroom that included congressional leaders and members of the administration, counsel for both sides faced tough questions about statutory interpretation, federalism, and whether a ruling against the government would result in a “death spiral” of fewer insured persons and higher premiums.

    With Chief Justice Roberts remaining mostly above the fray and Justice Anthony Kennedy expressing reservations about aspects of both the petitioners’ and the government’s arguments, the outcome remained very much in doubt at arguments’ end. Justice Samuel Alito, acknowledging the disruptive effects of a ruling against the government, noted that the court could stay its mandate, presumably to give the states more time to establish exchanges.

    A decision is expected by the end of June.