Supreme Court upholds Obamacare tax credits

Obamacare has actually survived– again.

In a significant win for the Obama administration, the Supreme Court held in a 6-3 decision that the Affordable Care Act authorized federal tax credits for eligible Americans living not only in states with their own exchanges but also in the 34 states with federal exchanges.

Chief Justice John Roberts composed for himself, Justice Anthony Kennedy and the four liberal justices. Justice Antonin Scalia wrote the dissent, signed up with by Clarence Thomas and Samuel Alito.

The judgment fended off a major political showdown and exactly what would have been a mad scramble in some states to establish their own health care exchanges to keep millions from losing healthcare coverage.

Oppositions to the law suggested that the federal government must not be enabled to continue doling out subsidies to people residing in states without their own healthcare exchanges and a judgment in their favor would have cut off subsidies to 6.4 million Americans, absent a congressional fix or state action.

The judgment is a huge triumph for President Barack Obama who almost saw those 4 words in the Affordable Care Act toss his signature accomplishment into mayhem.

The income-based subsidies are essential to the law’s success, helping to make health insurance more affordable and eventually minimizing the variety of uninsured Americans, and shutting down the subsidy spigot to people in the 34 states that count on exchanges run by the federal government would have upended the law.

Congress would have needed to change the Affordable Care Act to take care of the “established by the state” language– a politically treacherous and likely illogical action in a Republican Congress– or governors in the 34 states without their own exchanges, most of them Republicans, would have had to develop their own exchanges– another tough ask.

Obama’s signature law was as soon as again conserved by an unlikely hero: Chief Justice John Roberts, a conservative who has now two times protected the law from being gutted.

Roberts took heat from conservatives in 2012 when he initially saved the law from a major constitutional challenge in a choice that stunned experts and politicos across the ideological spectrum. The Chief Justice on Monday when again joined the court’s 4 liberal justices in promoting the law.

Just 16 states and the District of Columbia have actually set up their own health insurance marketplaces, which left millions of residents in the 34 states that depend on exchanges run by the federal government susceptible to the Supreme Court’s judgment.

Oppositions had suggested that the words “developed by the State” clearly barred the government from administering subsidies in the 34 states without their own healthcare marketplaces.

They said that Congress limited the subsidies in order to encourage the states to set up their own exchanges and when that failed on a huge scale, the IRS attempted to “repair” the law.

“If the rule of law implies anything, it is that text is not definitely malleable, and that companies have to follow the law as written—not modify it to ‘better accomplish’ exactly what they presume to have been Congress’s functions,” wrote Michael Carvin, an attorney for the oppositions.

But it was Solicitor Generald Donald B. Verrilli, Jr. who won over the justices, arguing that Congress constantly meant the subsidies be offered to everyone– despite the actions of their state leaders.

Verrilli cautioned in court briefs that if the challengers dominated, the states with federally-run exchanges “would face the really death spirals the Act was structured to prevent and insurance coverage for countless their locals would be snuffed out.”

Lower courts had split on the issue. The U.S. Court of Appeals for the District of Columbia revoked the IRS policy while the 4th Circuit Court of Appeals ruled in favor of the Obama administration.

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