Obamacare survives Supreme Court ruling

By Tom Ensey

The Supreme Court handed down a ruling in the second major challenge to Obamacare in three years. (Source: SupremeCourt.gov)

(RNN) – The Affordable Care Act, also known as Obamacare, survived a legal challenge that could have derailed the Obama administration’s signature piece of legislation. The 6-3 ruling allowed the IRS to continue to grant tax-credit subsidies to millions of low-income people in 34 states that do not have their own health insurance exchanges.

Implementation of the law will continue as planned. People who received subsidies on health insurance they applied for through the federal exchange will be allowed to keep them.

The plaintiffs in King v. Burwell  based their challenge on a literal reading of the law, citing one sentence that said subsidies could only be granted to qualified individuals though “exchanges established by the state.”

Multiple Democrats and Republicans involved in the drafting of the law told the New York Times that particular sentence was a clerical error.

The King v. Burwell case was the second major legal threat to the ACA in three years. The act survived a 2012 constitutional challenge when Chief Justice John Roberts cast the swing vote in a 5-4 decision that saved the legislation from being declared unconstitutional because of its requirement that individuals purchase health insurance.

In his opinion, Roberts wrote that the mandate was more a tax on people who did not buy health insurance than a means of coercion, and that the IRS acted reasonably in implementing it. He cited an earlier ruling, Chevron U.S.A. Inc v. Natural Resources Defense Council that said when a law is ambiguously written, judges should defer to the decision of the agency required to enforce it, provided the decision is reasonable.

A lower court cited the same ruling in favor of the Obama administration against the plaintiffs in King v. Burwell. The judges in that case ruled that the law was ambiguous and the IRS acted reasonably in enacting the regulations that it did.



Scroll to Top