The issue of subsidies on the federal exchange has been accepted by the Supreme Court.Scotusblog reports:
The Supreme Court, moving back into the abiding controversy over the new health care law, agreed early Friday afternoon to decide how far the federal government can extend its program of subsidies to buyers of health insurance. At issue is whether the program of tax credits applies only in the consumer marketplaces set up by 16 states, and not at federally-run sites in 34 states.Rather than waiting until Monday to announce its action, which would be the usual mode at this time in the Court year, the Justices released the order granting review of King v. Burwell not long after finishing their closed-door private Conference.By adding the case to its decision docket at this point, without waiting for further action in lower federal courts, as the Obama administration had asked, the Court assured that it would rule on the case during the current Term. If it confines the subsidies to the state-run “exchanges,” it is widely understood that this would crash the Affordable Care Act’s carefully balanced economic arrangements.
We previously wrote about the King case, Whipsaw: 4th Circuit upholds Obamacare federal exchange subsidy after D.C. Circuit rejects:
From the opinion intro (emphasis added):
The plaintiffs-appellants bring this suit challenging the validity of an Internal Revenue Service (“IRS”) final rule implementing the premium tax credit provision of the Patient Protection and Affordable Care Act (the “ACA” or “Act”). The final rule interprets the ACA as authorizing the IRS to grant tax credits to individuals who purchase health insurance on both state-run insurance “Exchanges” and federally-facilitated “Exchanges” created and operated by the Department of Health and Human Services (“HHS”). The plaintiffs contend that the IRS’s interpretation is contrary to the language of the statute, which, they assert, authorizes tax credits only for individuals who purchase insurance on state-run Exchanges. For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion. We thus affirm the judgment of the district court.
The 4th Circuit case was contrary to the initial decision of the D.C. Circuit in the Halbig case. That panel decision later was vacated when the entire D.C. Circuit agreed to en banc review.
Many observers thought that the lack of a circuit split would cause the Supreme Court to decline to take the case, but obviously that was wrong.
The constitutionality of Obamacare is not at issue. Rather, the issue is the plain wording of the statute, and how much discretion the IRS and administration have to alter that plain wording.
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