Written by Lindsey Stephens, Duke Law School Extern, and Beth Stephens, Health Access Program Director
On March 4, 2015, the U.S. Supreme Court will hear oral arguments in King v. Burwell. At issue is whether the advance premium tax credits available to people with incomes between 100% and 400% of the Federal Poverty Level, a key provision of the Affordable Care Act (ACA), apply to individuals who purchased insurance through federally-facilitated marketplaces and via healthcare.gov. Petitioners in the case argue that premium subsidies should not be available in states with federally-facilitated marketplaces because these are not marketplaces “established by the state,” as required by the language of the ACA statute. On the contrary, the respondents’ position is that the IRS regulations governing premium tax credits correctly interpreted the ACA statute to include a federally-run marketplace established by the Department of Health and Human Services (HHS) standing in as a surrogate for the state. Georgia, which has a federally-facilitated marketplace, is one of 34 states that will be impacted by the Court’s decision. More than 400,000 Georgians could lose their subsidies.
Current and former members of Congress who were involved in drafting the ACA have commented that, “everyone understood that tax credits would be available to purchasers on all of the Exchanges, federal and State.” Further, twenty-three state attorneys general submitted an amicus brief in King v. Burwell explaining that states did not take into consideration the possibility that premium tax credits would not be available in federally-facilitated exchanges when making the decision about whether to operate a state-run exchange.
If the Court rules for the petitioners, who are challenging the IRS’s interpretation of the ACA, millions of people across the United States may no longer have access to affordable health insurance under the ACA. In Georgia alone, 90-94% of the people who purchased plans in the 2015 marketplace are receiving federal financial assistance. These subsidies, which would no longer be available if the Court rules in favor the petitioners, can reduce the cost of monthly premiums by as much as 89%.
The Supreme Court’s decision is expected by June 2015, which is the end of the current term. For a more in-depth analysis of the arguments of the petitioners and the respondents, as well as the merits of the case, visit the Kaiser Family Foundation’s guide to the Supreme Court Arguments in King v. Burwell.