- A spokesperson for the US Supreme Court confirmed on Monday that the Court will hear King v. Burwell, the case that will determine the fate of federal subsidies for exchange plans, on March 4.
- The case came to the Supreme Court via the 4th Circuit of Appeals in Virginia, which ruled that the intent of disputed language in the Affordable Care Act legislation was to provide enrollees on both state and federal exchanges with subsidies.
- If the Court rules in favor of the plaintiffs, the decision could wreak havoc on the structure of the Affordable Care Act.
The Supreme Court often takes on cases that are split in lower courts, which this issue originally was: On the same day the Virginia court issued the King v. Burwell ruling, a US Circuit Court in the District of Columbia ruled in a split decision in Halbig v. Burwell that the law clearly stated subsidies were only allowed in states that had established their own exchanges—the opposite decision. The Halbig decision was vacated in September, however, and the case is set to be heard by the court in mid-December.
The ramifications for the Affordable Care Act, if the case is decided in favor of the plaintiffs, are huge. Approximately 5 million people are signed up for the subsidies, with discounts averaging about 75% of the face value of their premiums, according to the Department of Health and Human Services. These people may find insurance too expensive to purchase without the subsidies. And because the employer mandate applies only if employees receive federal tax credits, employers would be able to drop coverage without paying a penalty in the 36 states using the federal exchange.
"But insurers would still be required to cover individuals regardless of preexisting conditions," Tim Jost, a law professor at Washington and Lee University in Lexington, VA, wrote in a July 9 op-ed piece in The Washington Post. "Without the tax credits and mandates, insurance premiums would go through the roof and the entire individual insurance market could collapse in many states."