The politics of the Affordable Care Act, more commonly referred to as “Obamacare,” never seem to settle. On March 4, 2015, the Supreme Court heard Oral Arguments in the most recent challenge to Obamacare, King v. Burrwell. Some people, who perhaps do not passionately follow constitutional challenges and the like, must be wondering, didn’t we go through this already?
To clarify, Obamacare was challenged in the Supreme Court prior to the pending litigation but on an entirely different issue. In National Federation of Independent Business v. Sebelius, the court weighed whether or not the federal government exceeded its power in mandating that certain Americans purchase private health insurance. This landmark case was decided on June 28, 2012 with the court ultimately concluding that requiring the purchase of health insurance was within the scope of federal authority under the taxing and spending clause of the constitution. This was a rather fascinating ruling in that most assumed that any power to mandate the purchase of a private commodity would stem from the commerce clause rather than from taxation. (Perhaps I use the word fascinating too loosely.)
By contrast, the current litigation pending in the Supreme Court essentially rests on a technicality. A core tenet of Obamacare is the availability for Americans to purchase health insurance in government run exchanges and receive government financed subsidies to help offset the cost of health insurance. The legislation called for every state to establish a “state run” exchange and for the federal government to establish a federal exchange as well. The purpose of the federal exchange is to service those Americans who reside in a state that failed to establish an exchange.
What led to the current Supreme Court case has to do with the way the legislation was drafted with respect to the availability of subsidies. The language of the statue calls for subsidies to be made available for those who purchase health insurance through an exchange “established by the state.” The plaintiffs thus argue that the legislation never intended for subsidies to be made available for those who purchase insurance through the federal exchange, but rather, subsidies are reserved for state run marketplaces.
The implications of this case are quite significant as only 21 states have set up their own exchanges. As a result, should the Supreme Court strike down federal subsidies, residents of 29 states would lose access to Obamacare subsidies. Unfortunately for any New Jersey resident relying on these subsidies, New Jersey has not established its own insurance exchange.
However, many see the likelihood of the Supreme Court siding with the plaintiffs in this case as quite slim and attribute the language in the legislation referring to an exchange “established by the state” as sloppy drafting. A primary purpose of Obamacare was to ensure access to health insurance through the availability of government subsidies; why then, they argue, would Congress not intend for subsidies to be made available through the federal marketplace?
Whatever the court concludes, one thing is certain: Americans will be debating the merits of Obamacare long after the ruling.
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