The Supreme Court has agreed to hear a new challenge to the Obamacare's health-care subsidies, and its ruling could potentially undermine an integral piece of the law.
The court will hear arguments for a case challenging tax cuts for insurance purchased on exchanges that the federal government set up under Obamacare, according to SCOTUSBlog. The case, King vs. Burwell, along with a similar challenge known as Halbig vs. Burwell, contend that the Affordable Care Act only creates federal subsidies for insurance purchased on exchanges set up by states themselves. If a state chooses not to set up an exchange, the federal government can step in to do so — but the plaintiffs argue federally established exchanges cannot benefit from the subsidies.
The Democratic authors of Obamacare say they intended for everyone on the exchanges to receive subsidies, as insurance wouldn't be affordable and the health care law wouldn't work otherwise. The actual wording of the law, however, makes it unclear whether those on the federal exchanges are permitted to receive the subsidies. The IRS created a new rule, which the King vs. Burwell challenges, to make it more explicit.
Both the King and Halbig cases had been working their way up the lower courts. In September, the Appeals Court for the District of Columbia announced that its entire panel of judges — the majority of whom are Democrat-appointed — would hear Halbig en banc in December. The Supreme Court's decision before then suggests that the justices are particularly eager to hear the case, which has worried supporters of the law and emboldened its opponents.
"This lawsuit reflects just another partisan attempt to undermine the Affordable Care Act and to strip millions of American families of tax credits that Congress intended for them to have," White House press secretary Josh Earnest said in a statement, referring to the King vs. Burwell case. "We will continue to ensure that every American has the peace of mind of having access to affordable insurance. We are confident that the Supreme Court will recognize both the clear reading of the entire law, and the certain intent of Congress in crafting it."
There are 34 federally established exchanges, and an estimated 7.3 million people will receive subsidies for insurance by 2016, according to the Robert Wood Johnson Foundation. If the court ruling strips those subsidies away, purchasing insurance on the exchange would become prohibitively expensive for most of these beneficiaries, undermining a pillar of the entire law.