The Supreme Court said it will hear oral arguments on March 4 in a lawsuit over whether the Obama administration is improperly providing tax credits to consumers who purchase health insurance through the federal exchanges.
The case will determine the fate of the tax credits to millions of consumers who have obtained insurance coverage through HealthCare.gov, the federal marketplace. The Supreme Court decided Nov. 7 to hear the lawsuit from Virginia, King v. Burwell, that challenges a key part of the Affordable Care Act. In all, an estimated 4.7 million people receive billions of dollars in subsidies to buy health coverage on the federal exchange.
Challengers claim the language in the health law only permits people who buy insurance from state-run exchanges to obtain the tax credits. Supporters of the law say it was always intended to provide the subsidies to people who bought coverage on the federal exchanges, too. HealthCare.gov, the federal exchange, now serves 37 states.
On March 4, the Supreme Court will only hear arguments related to the King case. Normally the court schedules two cases on arguments days, each an hour long.
At least a dozen states are fully running their own exchanges. A number of other states are in a gray area because they have turned over at least some responsibilities to the federal government. Officials in some of those states have already indicated they are willing to take further steps to guarantee their residents access to the tax credits if necessary.
The tax credits are considered central to the law’s success. Under the ACA, most Americans must have health insurance or pay a penalty. The exchanges let individuals who don’t have insurance from their employer, Medicaid or Medicare to purchase insurance policies, with tax credits for lower-income consumers.
Critics say the language of the ACA means that subsidies can’t go to consumers who obtain coverage through a federal exchange. Two U.S. appeals courts in July issued conflicting rulings on health-law subsidies, raising questions about the fate of tax credits provided to millions of Americans.