King v. Burwell
Full name: David King, et al. v. Burwell, Sec. of H&HS, et al.
Click here to read the decision
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Related IssuesObamaCare: What you should know
Related BillsPatient Protection and Affordable Care Act
Under the Patient Protection and Affordable Care Act (PPACA) you are eligible for government subsidies to help pay your monthly premium if...
The issue in this case was whether these subsidies apply to insurance purchased on any of the exchanges, or only those run by a state. On June 25, 2015, the Supreme Court ruled that the subsidies apply to all states equally - regardless of how a state's exchange is operated.
* If your family earns less than the federal poverty level, you are eligible for Medicaid Expansion (unless the state you live in has refused it).
What about the law was in question?
A clause in the law describing the amount of assistance someone is eligible to receive states that the assistance is for health plans "... which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act..."
A libertarian think tank, the Competitive Enterprise Institute (CEI), asserted that this phrase means that assistance provided through the federal exchange would violate the law.
Several points countered that claim...
The phrase in contention was in Section 1401 of the law
Who (and where) were the plaintiffs?
The plaintiffs in this case might just have been the most telling aspect. For one thing, a ruling in either direction might not have even affected them. If it did, a ruling in their favor was more likely to hurt them rather than to help them.
So why did they sue the government? They really didn't. The case was planned and paid for by the Competitive Enterprise Institute. To bring the lawsuit, however, CEI needed to find people who could claim that having the federal exchanges offer subsidies would cause them harm.
The four plaintiffs CEI found (including David King who is named as the main plaintiff) share a common thread...
Interviews with Mother Jones magazine revealed a few other aspects... such that the plaintiffs have had no participation in the case and don't fully understand it. One was dismayed when told prior to the decision that a ruling in her favor could cost millions of people their health insurance.
For more, read the Mother Jones story.
How did this case evolve?
The Supreme Court heard oral argument in this case on March 4, 2015.
This case originally was filed as King v. Sebelius. Kathleen Sebelius was the Secretary of Health and Human Services at the time the suit was filed. When Sebelius was replaced by Sylvia Matthews Burwell, the suit was renamed.
Federal courts had ruled against the suit's premise. In a parallel suit also coordinated and financed by CEI - Halbig v. Burwell - a 3-judge panel ruled 2-1 in favor of the premise, but that decision was put on hold as the Supreme Court would issue the final ruling on the law.
On June 25, 2015 the Court ruled in favor of the government - allowing the subsidies for every state.
Click here to read the suit.
Roberts: Congress could not have meant otherwise
In his majority opinion, Chief Justice John Roberts wrote...
The combination of no tax credits and an ineffective coverage requirement could well push a State's individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner...
Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.
About 10 million people would have lost insurance
Residents of at least 34 states would have experienced profound effects if the court had ruled that subsidies are legal only in states that use their own exchange.
For starters, more than 9 million people would have lost the subsidies they currently receive, according to a study by the Urban Institute. These are people who earn less than 4 times the federal poverty level (the cutoff for subsidies). Of those, more than 8 million likely would have discontinued their health care coverage.
Most would have lose coverage because the loss of the subsidy would have made coverage unaffordable to them (the law requires them to have insurance only if it would cost them no more than 8 percent of their income).
Many who earn more than 4 times the federal poverty level - and therefore do not receive subsidies - would have lost coverage for a different reason. It was expected that many of the 8 million losing insurance would be young and healthy - the people insurance companies depend on to keep premiums lower. The loss of these people would have meant an increase in premiums for those who remaiedn insured - in some cases by more than $200 per month. Many would have paid the difference. The Urban Institute estimates that more than a million of these people would have dropped their insurance coverage because of the increased cost.
To learn more about who would have become uninsured had the Court rules against subsidies for those using the federal exchange, read the Urban Institute report.
Positive effects would have been reversed
Hospital Corporation of America - one of the nation's largest health care providers - has been monitoring the effects of the Affordable Care Act. According to an amicus curiae that the company filed with the Supreme Court, uninsured patients are three times more likely to visit an Emergency Room than a patient receiving a subsidy to pay for insurance. Insured patients are more likely to to receive needed care outside of the emergency room.
"HCA's data show that the [Affordable Care Act] is functioning as intended," the company states in the document.
Click here to read the brief.
Most states would have been affected
There are 34 states that use the federal exchange. Their residents would have lost federal subsidies had the court ruled in favor of the plaintiffs.
Click here to see which states use their own exchange and which ones rely on the federal exchange.
Only those in the State-based category were guaranteed to not be directly affected. The effect on those in the Federally-supported State Based category was unknown. They had planned to operate their own exchange, but the federal government now operates some part of their system.
All other states would have been affected.
What could states have done?
If the Supreme Court had ruled that the wording of the Affordable Care Act precludes subsidies for those living in states that do not operate their own exchanges, affected states could have built their own. That would have allowed the subsidies to be reinstated.
But that was extremely unlikely that would happen anytime soon. To be available for 2016, a new exchange would need to be up and running by October - when the open enrollment period starts. With the court's decision not coming until June, that would have left a state with at most 4 months to build a system so complex. Aside from the technical and administrative factors in the way, hurdles include....
For more on what it would take for a state to create a new exchange, read this New York Times story.
What can the federal government do?
Congress could have enacted a new law that explicitly would allow subsidies for all states.
There was no need to wait for the Court's decision. In fact, enacting such a law before the Court issued it's decision would have rendered the case meaningless.
More - and what you can do