Supreme Court Rules Health Insurance Subsidies Can Continue in All States

Some 6.4 million Americans in states relying on the healthcare.gov federal insurance exchange will continue to receive subsidies for coverage after the U.S. Supreme Court ruled June 25 that the Affordable Care Act allows such financial support.

The law’s supporters applauded the court’s decision. “The ACA’s goals of improving affordability and removing barriers to access for health insurance have been critical in reducing the number of uninsured Americans,” said Jo Ann Jenkins, CEO of AARP. “Importantly, for older Americans, we have seen a 31 percent drop in the uninsured rate for those ages 50-64.” AARP, along with the National Health Law Program, filed an amicus brief supporting the availability of the subsidies in all marketplaces.

Read the full AARP statement on the court’s ACA ruling »

The 6-3 decision came in response to a challenge to the law, King v. Burwell, insisting that language stipulating that subsidies are available to those who get coverage “through an exchange established by the state” meant that Congress intended to limit the subsidies to state-run exchanges. In the majority opinion, Chief Justice John Roberts wrote, "A fair reading of legislation demands a fair understanding of the legislative plan. Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter."

The ruling helps keep coverage affordable for low- to moderate-income Americans and averts potential disruption in the insurance industry in the 34 states using healthcare.gov. An analysis from the Kaiser Family Foundation found that those subsidized enrollees would have faced an average premium increase of 287 percent if the court ruled against the Obama administration, which could have driven many healthy customers out of the market and made insurance unaffordable for many more people inside or outside the exchanges.

Of the 16 million Americans who today have insurance because of expanded coverage made possible by the health law, some 10.2 million of them purchased plans directly from the federal and state exchanges, the latest figures from the U.S. Department of Health and Human Services show. About 8.7 million of them receive subsidies to help pay for coverage, including the 6.4 million whose subsidies had been at risk.

Photo: Creativeye99/iStock

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