Sunday, March 22, 2015

King v. Burwell

King v. Burwell

This is the current challenge to the Patient Protection and Affordable Care Act (Obamacare) pending before the United States Supreme Court. Oral arguments are scheduled for March 4, 2015.
Issue: Whether the Internal Revenue Service may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through exchanges established by the federal government under Section 1321 of the Patient Protection and Affordable Care Act.

Recall that states had the option of creating their own exchanges, which many did. Where a state did not create an exchange (36 states), the federal government stepped in and created an exchange ( so the people of the state would have a place to go for insurance coverage.

However, the statute creating the Affordable Care Act states that subsidies are available to those otherwise qualifying people who purchased insurance through state exchanges. If the Court agrees, subsidies (tax credits) would be denied for those using the federal exchanges in states that decided not to implement their own exchange.

While this may seem just a "technicality," the case could gut a major provision of the Affordable Care Act that allows millions of people to obtain health insurance. Without subsidies, millions of people would not be able to afford insurance. If these people do not participate in the program, it would fail. The ACA requires individuals to either purchase health insurance or pay a tax penalty, and it is the mass participation that keeps the pool of the insured from being drawn only from those who most need expensive medical care.

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