07/01/2015

Affordable Care Act

Act Survives Supreme Court Challenge

In a 6-3 decision, the Supreme Court saved the controversial health care law that will define President Barack Obama's administration for generations to come.

The ruling holds that the Affordable Care Act authorized federal tax credits for eligible Americans living not only in states with their own exchanges but also in the 34 states with federal marketplaces. It staved off a major political showdown and a mad scramble in states that would have needed to act to prevent millions from losing health care coverage.

Challengers to the law argued that the federal government should not be allowed to continue doling out subsidies to individuals living in states without their own health insurance exchanges and a ruling in their favor would have cut off subsidies to 6.4 million Americans, absent a congressional fix or state action.

The income-based subsidies are crucial to the law's success, helping to make health insurance more affordable and ultimately reducing the number of uninsured Americans. Shutting off the subsidy access to individuals in the 34 states that rely on exchanges run by the federal government would have upended the law.

Congress would have had to amend the Affordable Care Act to fix its language that subsidies would be available only to those who purchase insurance on exchanges "established by the state.”