Supreme Court delays hearing ACA subsidy case

November 03, 2014
Area(s) of Interest: Advocacy Health Care Reform 

The U.S. Supreme Court has declined to hear King v. Burwell—a case the questions whether premium subsidies can be provided under the Affordable Care Act (ACA) to individuals purchasing health insurance coverage on exchanges run by the federal government.  The lawsuit has the potential to affect states that use the Federal health care exchange, but would not change the subsidies in states like California that run their own exchanges.

The question asked in King v. Burwell is whether the language of the ACA law allows consumers to receive premium tax credits in states that have not established their own exchanges and instead rely on the federal HealthCare.gov website. Although the law says the tax credits are available only to those who enrolled “through an exchange established by the state,” the Obama administration has argued that the law's intention was to offer subsidies and expand coverage to Americans in every state.

A 4th Circuit panel in Virginia unanimously ruled in favor of the Obama administration in King v. Burwell in July, saying subsidies should be allowed in all 50 states. The plaintiffs in the case appealed to the Supreme Court.

Experts expect the court will hold off hearing this case until the outcome of another case, Halbig v. Burwell, that looks also at subsidies, is heard. The Halbig case was originally heard in July by a panel of the U.S. Circuit Court for the District of Columbia and resulted in a split decision on whether subsidies should not be allowed in states without their own exchanges.  That decision was vacated in September when the full D.C. circuit court decided to hear the case en banc. This hearing is set for Dec. 17.

In early October, a third federal court ruled in Pruitt v. Burwell on summary judgment that the federal government could not subsidize health insurance in states that have not established their own health insurance exchanges under the ACA. Summary judgment allows the matter to be decided without a trial. Instead the judge rules after reading the arguments present by both sides. A fourth case, filed by the State of Indiana and local school districts, is pending in Federal District Court in Indianapolis.


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