US Supreme Court v Obamacare: round 2.

The US Affordable Care Act (“Obamacare”) was designed to expand health insurance coverage in three major ways: allowing young people through to age 25 to be included on their parents’ policies; expanding the Medicaid program for poor people to include those earning up to 133% of the federal poverty level; and providing federal subsidies to help low and middle income people afford mandated health insurance. The third mechanism, subsidies, in the form of tax credits, has become the latest focal point for controversy. A little known lawyer discovered four words in the 1000 page law that cast doubt on whether the subsidies could be given to around seven million people who were already receiving them. Obamacare gave each state the option of setting up its own marketplace (called an exchange) to sell health insurance policies to its citizens. If the state declined, then the federal exchange—healthcare.gov—took over that state’s enrollments. Only 13 states set up their own exchanges, leaving about three dozen that defaulted to the federal exchange. Around seven million low and middle income Americans have received tax credit subsidies in these states. Here’s where the four words come in. One part of the law states that tax credits were to be issued by exchanges that had been “established by the states.” Does this mean that those people who purchased healthcare through the federal exchange were ineligible for subsidies? Not according to the Internal Revenue Service, the taxing agency that set up the tax credits. Not according to those who wrote the law, who said it was just a mistake in drafting. And not according to the overall thrust and strategy of the law, which was clearly intended to maximize coverage throughout the country. A small libertarian think tank took up the challenge and searched for injured parties and hired lawyers so that they could file multiple lawsuits demanding that the subsidies in the states using the federal exchange be invalidated because of these four words. Two of those cases, with conflicting results in lower courts, have now reached the US Supreme Court for a final decision. The name of the case is King v Matthews. Drastic consequences