Will SCOTUS ruling on King v. Burwell be "nail in coffin" for Obamacare?

Supreme Court to Hear Case on Health Law Subsidies - Challengers Argue Affordable Care Act Only Permits Tax Credits on State-Run Exchanges
The Supreme Court on Friday agreed to review whether consumers can receive subsidies through the Affordable Care Act for insurance purchased through a federal exchange, taking up a key piece of the Obama administration’s health-care law. The move puts before the high court one of several cases over the subsidies. The justices accepted a challenge from Virginia that the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., had rejected. The Fourth Circuit in July found in favor of an Internal Revenue Service rule extending tax credits to lower-income Americans who purchase coverage through the federal insurance exchange. Conservative groups, seizing on wording in the Affordable Care Act, have sued, arguing the subsidy is limited to people who buy insurance through state-run exchanges. Federal exchanges are in place in more than 30 states that haven’t established their own exchanges.
Comment: See The real threat to the ACA
A lawsuit known as Halbig v. Burwell has been winding through the courts, and if plaintiffs succeed it could mean the elimination of federal subsidies for as many as 7 million people covered under the program by 2016. It could still take a year or two for the legal maneuvering to play out, and the case could ultimately land at the Supreme Court. The thing to know is that this is a sleeper case with potential ramifications more serious than anything likely to get through Congress during the next two years.
Comment: Image source

Several updates (on 11/8):


  1. Yet more: Supreme Court to Hear Obamacare Federal Exchanges Case:

    The U.S. Supreme Court announced today it will hear King v. Burwell, a challenge to the Internal Revenue Service’s authority to subsidize health coverage purchased through insurance exchanges run by the federal government.

    It’s likely the court will schedule oral argument in early 2015 and issue a decision by the end of June.

    Section 36B of the Internal Revenue Code (enacted as part of Obamacare) authorizes premium tax credits for health insurance purchased by qualifying individuals through an exchange “established by the state.”

    But since 36 states opted not to run their own exchanges, the federal government created federal “fallback” exchanges for those states. The IRS issued regulations specifying that the premium tax credits could be claimed by individuals who purchased insurance through a federally run exchange.

  2. File this under ASSUME = "Makes an ASS out of U and ME":

    States Urge Upholding of Health Law’s Tax Credit

    Eleven states that could be affected if the Supreme Court upholds the latest challenge to the Affordable Care Act told a court earlier this week they had assumed residents could still receive the law’s tax credits even if they didn’t build their own exchanges.

  3. Four words that could deep-six Obamacare

    Why the fuss over four words?

    Answer: The law states that tax credits will be available through so-called exchanges, or online marketplaces, "established by the State." When it was being crafted, it was assumed that all 50 states would create their own exchanges. After it passed in March 2010, it became clear that many states would rely on the federal government to operate them, as the law allows.

    In 2012, the Internal Revenue Service made the subsidies available in all states. The law's challengers claim they cannot be offered in exchanges operated by the federal government. Thirty-six states fit into that category. Without subsidies, insurance costs would skyrocket.

  4. How One Senator’s Scheme Could Come Back to Haunt Obamacare

    Former U.S. Sen. Ben Nelson may go down in history for casting the crucial 60th vote needed to pass Obamacare, but the concessions he got in exchange for that vote ultimately could doom the health care law.

    Nelson is well known for negotiating for extra Medicaid money for Nebraska—in what was derided as the Cornhusker Kickback, which was later scuttled. He was much less known for also insisting that states be allowed to run their own health care exchanges, where people shop around for health insurance.

    The question of whether federal subsidies can be given to people who did not sign up for the Affordable Care Act through state-run exchanges is the subject of a lawsuit, King vs. Burwell, the U.S. Supreme Court will take up next year.

    The plaintiffs argue the law bans the subsidies in 36 states that use a federal enrollment portal. If they prevail, subsidies would go only to low- to middle-income people in the 14 states that chose to run their own exchanges.

    If the challenge to the law is successful, some believe Obamacare would be obliterated.

    Who’s responsible for insisting the federal government set up those two options for states? Nelson.

    In 2010, Nelson told Politico and Fox News host Greta Van Susteren giving states the option of running their own exchanges was non-negotiable.

    And even now, Nelson confirms he insisted on the state-run exchanges “rather than just a federal program without any state options.”

  5. A good WSJ article: A Post-ObamaCare Strategy
    - The GOP needs a policy response if the Supreme Court kills subsidies.

    The immediate Republican goal should be to make insurance cheaper so people need less of a subsidy to obtain insurance. This means deregulating the exchanges, plank by plank. Devolve to states their traditional insurance oversight role, and allow them to enter into cross-border compacts to increase choice and competition. Allow insurers to sell any configuration of benefits to anyone, anywhere, and the private market will gradually heal. The liberal states that prefer ObamaCare’s command-and-control can keep it.

    In return, Republicans can offer to restore the subsidies for Mr. Obama—albeit smaller and in the form of a fixed-dollar tax deduction or credit for people who don’t benefit from the tax exclusion for employer-sponsored insurance. This could become a pilot program for a larger reform after the President leaves office. Such a deal would inevitably move health care to the center of the 2016 primaries and election. Both parties would be forced to have an instructive debate about their visions for a post-ObamaCare world.

  6. This New Poll Shows Why Obamacare Court Ruling Could Be Devastating:

    The stakes are getting higher in the looming Supreme Court case that threatens to rip apart the president’s health care law.

    A new Gallup poll released today shows that Obamacare’s provisions are largely responsible for driving America’s uninsured rate down to a 7-year-low—further illustrating how serious an adverse ruling could be for millions of people who currently have coverage under the law.

    According to Gallup, the uninsured rate dropped from 17.3 to 12.9 percent in 2014, with tens of millions of people gaining health coverage through Obamacare’s health exchanges as well as the law’s Medicaid expansion. Changes in state uninsured rates were especially dramatic in states that have embraced the health care law more than others, including setting up their own Obamacare exchange, and expanding their Medicaid programs, according to the survey.

  7. A First Step on the Way Out of ObamaCare -
    Cobra-like insurance could bridge the gap for people losing coverage if King v. Burwell goes the GOP’s way.

    if the court affirms the law’s actual language over the administration’s incessant political rewriting, it could be a mortal blow to ObamaCare.

    But I am also worried that unless those of us who oppose ObamaCare unite behind an approach that offers Americans a better alternative, we could lose the whole war.

    If the justices prohibit the Treasury Department from granting subsidies to patients living in states without state-run exchanges, then the Machiavellian fine-print that regulators wrote to protect their bedfellows means that big insurers will be allowed to dump ObamaCare patients midyear.

    First, in the event that the court strikes down the subsidies as illegal, Congress must be prepared to offer immediate, targeted protection to those hurt by this administration’s reckless disregard for the rule of law. ObamaCare took these patients hostage. Conservatives have a duty to save them.

  8. Obama makes moral case for preserving his healthcare law:

    Congressional Republicans, meanwhile, have said they don’t want to see Americans lose their subsidies, but they’ve struggled to coalesce around a single alternative. On Monday, a top Senate Republican once again rejected the prospect of making the simple language tweak that Obama would like to see.
    “Let’s be clear: if the Supreme Court rules against the administration, Congress will not pass a so called ‘one-sentence’ fake fix,” said Sen. John Barrasso (R-Wyo.), ruling out simply clarifying the section in question that talks about subsidies for exchanges “established by the state.”


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