Supreme Court upholds ACA subsidies nationwide

The U.S. Supreme Court ruled on Thursday that the subsidies offered as part of the Affordable Care Act (ACA) will be available nationwide, regardless of whether they are used to buy health insurance on an exchange established by the federal government or an individual state.

The decision marks the second time the Supreme Court has ruled in support of a major plank of the ACA, the administration’s signature healthcare reform. In 2012, the court ruled that the law’s individual mandate to purchase insurance was constitutional.

This time, the issue revolved around language in the law involving the granting of subsidies to help poor and middle-class individuals purchase insurance coverage. A number of states created their own insurance exchanges, but 34 states are relying on a federal marketplace to facilitate coverage.

A phrase in the law seemed to indicate that the subsidies would be available only to those purchasing insurance on an exchange “established by the state,” prompting a legal challenge that would have eliminated subsidies for more than 6 million people covered under the federal exchange. Supporters and authors of the ACA contended that the law, when read in its entirety, clearly suggested subsidies should be available nationwide, and the Supreme Court agreed.

"In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase,” read the majority opinion.

The majority continued: "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”

The decision was 6-3 in favor of preserving the subsidies, with justices Roberts, Kennedy, Ginsburg, Breyer, Sotomayor and Kagan joining in the majority opinion. The decision affirms a ruling made by the U.S. Court of Appeals for the Fourth Circuit, in Richmond, Va.

In response to the ruling, American Medical Association (AMA) President Steven J. Stack, MD, issued a statement saying the AMA is “relieved that today’s Supreme Court decision will allow millions of patients to continue accessing the health care they need and deserve.”

“With this case now behind us, we hope our country can move forward and continue strengthening our nation’s health care system,” added Stack.