ACA Federal Subsidies Survive

June 24, 2015

King v. Burwell


The United States Supreme Court held that the Affordable Care Act ("ACA") allows tax credits for health insurance purchased on any Exchange created under the ACA.  The ACA contains a phrase that some argued allowed for subsidies to apply only to state based exchanges, which would have dramatically impacted individuals receiving subsidies through states that have federally facilitated exchanges (most exchanges are through the federal system.)  The Supreme Court found that the context and structure of the ACA called for the subsidies to apply to all exchanges, not just state run exchanges. The Court also noted that if it were to strike down the subsidies on federally based exchanges, it would have the negative impact of destabilizing the individual insurance market (i.e., many people would lose coverage as they would be unable to afford it). 

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