The Supreme Court has ruled that people who bought healthcare coverage through federal exchanges as part of Obamacare can keep subsidies that effectively limit the amount low- and middle-income Americans pay for health insurance to 9.5% of their income or less.
- TAX SUBSIDIES UPHELD BY U.S. SUPREME COURT
This is, naturally, a huge win for Obama whose Affordable Care Law has just overcome its last legitimate legal challenge. The outtcome is hardly unexpected (see below on "most liberal Supreme Court since 1960"), but that the final vote was 6-3 is clearly surprising as most pundits were expecting a 5-4 Roberts-led tiebreaker.
As The Hill summarizes, the SCOTUS upheld a key provision of ObamaCare, affirming that 6.4 million people can continue to receive subsidies that allow them to purchase healthcare plans.
The 6-3 decision authored by Chief Justice John Roberts is a huge victory for President Obama.
The case, King v. Burwell, represented the biggest legal threat to ObamaCare since the Supreme Court ruled the law was constitutional three years ago.
The decision puts an abrupt end to the years-long challenge from conservatives, led by the Competitive Enterprise Institute, that have also levied a half-dozen other lawsuits against the 5-year-old law.
The challengers argued that the Affordable Care Act only allowed subsidies to be used in marketplaces “established by the state” – which they said excluded those on the federal marketplace.
As noted previously, the reason why the final outcome of today's decision was largely anticipated is thanks to this chart by the NYT showing the [9]"surprising" move leftward of the Justice John Roberts Supreme Court:
The court has issued liberal decisions in 54 percent of the cases in which it had announced decisions as of June 22, according to the Supreme Court Database, using a widely accepted standard developed by political scientists. If that trend holds, the final percentage could rival the highest since the era of the notably liberal court of the 1950s and 1960s led by Chief Justice Earl Warren. The closest contenders are the previous term and the one that started in 2004 and ended with the announcement of Justice Sandra Day O’Connor’s retirement.
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The court's leftward movement is modest, and it remains well to the right of where it was in the Warren court years, when the percentage of liberal decisions routinely topped 70 percent. Yet the recent numbers do seem suggestive of a shift.
The chart above shows how the court has voted in every case by term — starting in October, usually ending the following June — since 1946. Decisions considered liberal are blue, and ones considered conservative are red, with darker shades representing more unanimity.
The chart makes clear that the court moved left in the early 1950s, remained there for almost two decades and has generally leaned right for the past 40 years.
More color on today's decision from WSJ [10]:
The U.S. Supreme Court ruled the Obama administration can continue to subsidize health-insurance purchases by lower-income Americans across the country, a decision that preserves a centerpiece of the Affordable Care Act.
The ruling marks the second time President Barack Obama’s signature domestic policy achievement has survived a near-death experience in the courts, and leaves the law on a firmer footing for the remainder of his time in office.
The court ruled contested language in the 2010 health-care law allows the administration to offer subsidies in the form of tax credits to people in all states, including those who buy health coverage on the federal insurance site HealthCare.gov.
Roughly 6.5 million Americans in around three dozen states stood to lose credits if the Supreme Court had ruled against the administration. The court was deciding whether the tax credits could only go to people in the minority of states running their own online insurance marketplaces, where people compare policies and apply for coverage.
At issue was language in the Affordable Care Act that says insurance subsidies are available for coverage purchased on an insurance-exchange “established by the state.”
The Obama administration argued the entire structure and design of the law made clear its purpose was to extend affordable coverage nationwide.
Challengers who sued the administration—four residents of Virginia—argued the wording of the law authorized insurance subsidies only when an individual buys coverage on a state-run insurance site. That legal question was crucial for the fate of the health-care law because most states didn’t create their own insurance exchanges and chose to rely on the federal marketplace instead.
As usual, the most amusing part of the SCOTUS decision is Justice Scalia's dissenting opinion. Here are someof the highlights:
Worst of all for the repute of today’s decision, the Court’s reasoning is largely self-defeating. The Court predicts that making tax credits unavailable in States thatdo not set up their own Exchanges would cause disastrouseconomic consequences there. If that is so, however, wouldn’t one expect States to react by setting up their own Exchanges? And wouldn’t that outcome satisfy two of the Act’s goals rather than just one: enabling the Act’s reformsto work and promoting state involvement in the Act’s implementation? The Court protests that the very existence of a federal fallback shows that Congress expected that some States might fail to set up their own Exchanges. So it does. It does not show, however, that Congress expected the number of recalcitrant States to beparticularly large.
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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.”
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Today’s opinion changes the usual rules of statutory interpretation for the sake of the Affordable Care Act.That, alas, is not a novelty. In National Federation of Independent Business v. Sebelius, 567 U. S. ___, this Court revised major components of the statute in order to save them from unconstitutionality. The Act that Congresspassed provides that every individual “shall” maintain insurance or else pay a “penalty.” This Court, however, saw that the Commerce Clause does not authorize a federal mandate to buy health insurance. So it rewrote the mandate-cum-penalty as a tax. The Act that Congress passed also requires every State to losing all Medicaid funding. This Court, however, saw that the Spending Clause does not authorize this coercive condition. So it rewrote the law to withhold only the incremental funds associated with the Medicaid expansion. Having transformed twomajor parts of the law, the Court today has turned its attention to a third. The Act that Congress passed makes tax credits available only on an “Exchange established bythe State.” This Court, however, concludes that this limitation would prevent the rest of the Act from working as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare.
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Perhaps the Patient Protection and Affordable Care Actwill attain the enduring status of the Social Security Act or the Taft-Hartley Act; perhaps not. But this Court’s two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed (“penalty” means tax, “further [Medicaid] payments to the State” means only incremental Medicaid payments to the State, “established by the State”means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence. And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takesto uphold and assist its favorites.
Full decision below (pdf link [11]):
The market's reaction is selling Biotechs and buying Healthcare ETF...
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