Supreme Court upholds PPACA subsidies in King v. Burwell: 10 things to know

The U.S. Supreme Court handed down its long-awaited opinion on King v. Burwell Thursday morning, ruling 6-3 that tax subsidies under the Patient Protection and Affordable Care Act are available to all Americans, even those who reside in states that did not establish their own health insurance exchanges.

Here are 10 key takeaways from the Supreme Court decision in King v. Burwell.

The parties' arguments in the case
1. The PPACA states tax subsidies for health insurance are to be provided "through an exchange established by the state." Based on the text of the law, the petitioners in King v. Burwell  brought their lawsuit challenging an IRS regulation that allows for subsidies in all states.

2. The government took the stance that the IRS rule allowing subsidies in all states — even those without their own marketplaces — is lawful because the language of the PPACA should be read to include federal exchanges.

The majority opinion in King v. Burwell
3. Chief Justice John Roberts wrote the court's majority opinion and was joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.

4. In his decision, Chief Justice Roberts argued that doing away doing away with the subsidies would send the individual insurance market in any state that did not establish its own health insurance exchange under the PPACA into the "very death spirals" the health reform law was designed to avoid. Chief Justice Roberts wrote, "It is implausible that Congress meant the Act to operate in this manner."

5. The majority of the court found the petitioners' argument unpersuasive. "The argument that the phrase 'established by the State' would be superfluous if Congress meant to extend tax credits to both the State and Federal Exchanges in unpersuasive," Chief Justice Roberts wrote.

This is a job for the Supreme Court, not the IRS
6. The high court went into a deep discussion of what is commonly known as the "Chevron 2-step." This framework was announced in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., and is often used when analyzing an agency's interpretation of a statute.

7. Under the framework, the court determines whether a statute is ambiguous. If it is, the court then determines whether the agency's interpretation of the statute is reasonable. "This approach is premised on the theory that a statute's ambiguity constitutes an implicit delegation from Congress to fill in the statutory gaps," Chief Justice Roberts wrote in the opinion, citing FDA v. Brown & Williamson Tobacco Corp. However, he then noted there are "extraordinary cases" where "there may be reason to hesitate before concluding that Congress has intended such an implicit delegation." The majority of the high court determined King v. Burwell was one of those "extraordinary cases."

8. Chief Justice Roberts wrote, "This is not a case for the IRS." He said it is "unlikely" that Congress would have delegated the decision about where tax subsidies are available to the IRS, "which has no expertise in crafting health insurance policy of this sort." Instead, it is the job of the Supreme Court to determine the correct reading of the section of the PPACA addressing tax subsidies, he noted.

9. As support for the majority opinion, Chief Justice Roberts focused on the purpose of the PPACA. "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter," he wrote.

Justice Scalia's dissent
10. Justice Antonin Scalia wrote a dissenting opinion in the case. Highlighting previous times the Supreme Court has weighed in on provisions of the PPACA, Justice Scalia said, "We should start calling this law SCOTUScare." Conservative Justices Samuel Alito and Clarence Thomas joined Justice Scalia's dissent.

More articles on the PPACA:

House votes to abolish Medicare cost-control panel
2016 PPACA insurance rates: 8 things to know
What primary care providers think after year 1 of PPACA coverage: 10 findings

 

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