Obamacare Goes Back on Trial: Supreme Court Agrees to Hear ACA Tax Subsidies Challenge

The U.S. Supreme Court agreed today to rule on
the Obamacare case King v. Burwell, which asks whether the
text of the Patient Protection and Affordable Care Act forbids the
granting of tax credits to individuals who purchased health
insurance on health care exchanges operated by the federal
government. The legal controversy arises from the fact that the
text of the 2010 health care law limits such tax credits to
individuals who purchased their insurance from an “exchange
established by a State.” Do those words cover the federally run and
established exchanges now operating in more than 30 states? We’ll
soon find out.

In its July 2014 ruling in favor of the Obama administration in
this case, the U.S. Court of Appeals for the 4th Circuit held that
while the text of the law appears to cut against the federal
government, the government’s interpretation was nonetheless
entitled to deference. “We cannot discern whether Congress intended
one way or another to make the tax credits available on
HHS-facilitated Exchanges. The relevant statutory sections appear
to conflict with one another, yielding different possible
interpretations,” the 4th Circuit argued. “Confronted with the
Act’s ambiguity, the IRS crafted a rule ensuring the credits’ broad
availability and furthering the goals of the law. In the face of
this permissible construction, we must defer to the IRS Rule.”

The big question now is whether the U.S. Supreme Court will also
defer to the I.R.S. rule, or whether this time around the Court
will deliver Obamacare a death blow.