Supreme Court: Obamacare Subsidies In Federal Exchanges Are Legal


The Supreme Court today issued their ruling in the King vs. Burwell case which challenged the legality of subsidies paid through the federal exchanges.

Under the Obamacare law as written, citizens are eligible for insurance subsidies only for each month they are “enrolled in through an Exchange established by the State.” The whole “established by the State” part has been the sticking point in the case.

The plaintiffs in King vs Burwell argue that the language is clear. Subsidies can only be paid to people who got their health insurance through a state-run exchange. Only, most states didn’t create their own exchange, and so if subsidies were cut off in those states it would likely cause the Obamacare law to collapse as policy.

Which was sort of the point of the lawsuit filed as it was by enemies of OBamacare.

A majority of the Supreme Court justices, however, found this argument to be “unpersuasive” calling the “established by the State” part of Obamacare “ambiguous.” The justices acknowledge that striking down the subsidies on the federal exchange would create “death spirals” in the law.

“It is implausible that Congress meant the Act to operate in this manner,” Roberts writes.

Here’s an excerpt from the majority opinion, written by Justice John Roberts. You can read the entire ruling below:


Justices Roberts, Kennedy, Ginsburg, Sotomayor, Kagan, and Breyer joined the majority opinion.

Obamacare partisans will declare victory, and rub it in the faces of Obamacare critics, but what’s more disturbing to me here than the future of health insurance policy in this country is that the Supreme Court is ruling based on their interpretation of what Congress meant to do. Not, you know, what they actually did.

Justice Scalia, who wrote the dissenting opinion joined by Justices Thomas and Alito, noted that this wasn’t just an issue of one ambiguous sentence in the law but more than a half dozen. “It is bad enough for a court to cross out ‘by the State’ once,” he writes. “But seven times?”

Scalia continues:

Faced with overwhelming confirmation that “Exchange established by the State” means what it looks like it means, the Court comes up with argument after feeble argument to support its contrary interpretation. None of its tries comes close to establishing the implausible conclusion that Congress used ‘by the State’ to mean “‘by the State or not by the State.”

This isn’t just a ruling which upholds a massive piece of bad public policy that is making health insurance more expensive and harder to get for millions of Americans. It’s also a body-blow to the concept of rule of law.

The law should mean what it means, and if we don’t like what it means then we should use the processes available to us to change it. Instead, we have the courts whitewashing bad policy after the fact with their interpretations of what was intended instead of what was done.

By the way, for those of you celebrating this great victory for Obamacare, I would point out that this doesn’t make the law better. This doesn’t alter the trend for spiraling insurance premiums. This doesn’t eliminate the millions upon millions of people Obamacare leaves uninsured.

The Court has said that the law is legal. Not that it is good policy.