The Supreme Court announced on Friday that it would hear King v. Burwell, a case challenging whether tax subsidies are available to individuals purchasing health insurance through the Federal exchange rather than State exchanges. In July, a three-judge panel for the U.S. Court of Appeals for the Fourth Circuit unanimously upheld the government’s position that tax subsidies also are available to individuals who purchase insurance through Federally-facilitated exchanges, as well as on State exchanges. Although noting that the language in the Affordable Care Act (ACA) regarding tax subsidies is ambiguous, the panel determined that the IRS rule “ensuring the credits’ broad availability and furthering the goals of [ACA]” was entitled to the court’s deference.

On the same day that King v. Burwell was decided by the Fourth Circuit, a divided three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit concluded “with reluctance” in Halbig v. Burwell that the ACA “plainly makes subsidies available only on exchanges established by states.” The D.C. Circuit granted rehearing en banc for that case, and it is scheduled for mid-December.

In another Federal court decision issued at the end of September in State of Oklahoma, ex rel. Pruitt v. Burwell, the U.S. District Court for the Eastern District of Oklahoma also determined that ACA, as written, provides for tax credits only to buyers purchasing insurance through state exchanges. 

Oral arguments before the Supreme Court in King v. Burwell are expected in March 2015.