“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” summarized Chief Justice John Roberts at the end of his landmark June 25th opinion in King v. Burwell. The decision upholds the right of people in states with federally-facilitated exchanges to get “premium tax credits”, the subsidies provided under the 2010 Affordable Care Act to help low and moderate income people afford health coverage.
Narrowly at issue in the case was a clause saying that subsidies are available in exchanges “established by the State”, leading to a legal challenge arguing that people in the 34 states that use healthcare.gov, the federally-facilitated marketplace, should not receive the subsidies. Chief Justice Roberts’s opinion, speaking for a 6-3 majority (Justices Scalia, Alito and Thomas dissented) makes clear that this language was a drafting error and totally contrary to the intent of Congress. Recent media interviews of those involved with drafting the law also support the decision.
In the 1990s, Chief Justice Roberts explained, New York and other states banned insurers from denying coverage or charging higher premiums to anyone due to their bad health. In response, many bought health coverage only when they got sick, forcing health insurers to increase premiums to account for an ever sicker risk pool, causing even more healthy people to drop their insurance (known as the “death spiral”). The ACA addressed this problem by adding two reforms necessary to make the system work: (1) a requirement that all Americans (with limited exceptions) maintain health coverage; and (2) the premium tax credits. In light of this history, Chief Justice Roberts said in his opinion, Congress could not have meant for residents of the 34 states not to get federal subsidies.
As a result of the decision, six million Americans will not be threatened with losing their coverage and health insurance markets are not facing chaos. But it’s also critically important that the ACA has turned a corner. The major legal challenges are over. A majority of Americans now support the law. As ACA supporters, we now have a new opportunity to increase our focus on making the law work rather than refighting the battles of 2009 and 2010.