The Court’s decision protects tax credits for those who reside in the 34 states where there are federally established exchanges.

On June 25, the U.S. Supreme Court — considering the second challenge to the 2010 Patient Protection and Affordable Care Act (aka ObamaCare) — upheld the legality of the Act’s subsidies to consumers who reside in states where there are no state-run exchanges. The 6–3 decision in King v. Burwell keeps intact the tax credits provided to 6.4 million Americans who reside in the 34 states where there are federally established exchanges.

Chief Justice Roberts, writing for the majority, noted that these tax credits are one of the “key reforms” of the Affordable Care Act, and that the challenge to the Act’s inartful and ambiguous language must be denied when the entire context of the Act is taken into consideration. His carefully worded opinion noted that to do otherwise would have undermined the very purpose of the Act. Chief Justice Roberts wrote, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.” That is exactly what the Supreme Court did in upholding the subsidies in this case.

Because this is the last major challenge to the Act that is pending before the federal courts, President Obama was correct in announcing that, after this decision, the Act “is here to stay.” Now, health care providers, health care insurers and the many Americans who have benefited from affordable health insurance are breathing a collective sigh of relief as they can proceed to operate in an environment that is more predictable and stable.  If you have any questions about the King v. Burwell decision, or any other aspect of health care law, please contact the author or any of the Pepper health care attorneys with whom you work.