In a 6-3 ruling this morning, the Supreme Court affirmed the legality of Affordable Care Act’s subsidized health insurance plans sold on Healthcare.gov. The Court rejected the argument of the plaintiffs in King v. Burwell, who argued that the phrase “through an exchange established by the State” meant that subsidized insurance could only be offered through a state exchange.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts wrote for the majority. “If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”
The ruling represents a victory for the Obama administration and a defeat for Congressional Republicans, who have devoted considerable energy to their efforts to repeal the ACA. There are several other winners, too:
- More than 6 million Americans no longer face the prospect of trying to pay for unsubsidized insurance. (The vast majority of those who purchased insurance on the federal and state exchanges qualified for tax credits.)
- Health insurers won’t have to scramble to re-submit 2016 rates for ACA plans, which would have been the case if the Supreme Court ruled in favor of the plaintiffs.
- The 34 states that declined to run their own health insurance exchange don’t face the politically difficult proposition of either spending millions of dollars to build an exchange or leaving residents without insurance subsidies.
There is now no doubt that the ACA train isn’t coming back to the station. Yes, the medical device tax faces repeal, and the “Cadillac tax” on high-priced plans may be next. Yes, Medicaid expansion seems to have hit a wall, with the two states that would most benefit (Florida and Texas) adamantly refusing to budge. Yes, the tax penalty for not being insured is still far too low to compel many “invincibles” to spend thousands on a health plan. Yes, Healthcare.gov and state exchanges could learn some lessons in user experience and basic website design.
However, for all its hiccups and challenges, the ACA is working. Among adults, the uninsured rate stands at an unprecedented 10.1 percent, according to the Urban Institute. The percentage of adults without insurance is even lower in the 30 states (plus the District of Columbia) that have expanded Medicaid. All told, an estimated 15 million Americans have obtained insurance thanks to the ACA since September 2013. And now the Supreme Court has upheld subsidized coverage.
Regulatory and legislative uncertainty will always loom over healthcare. The ACA will face additional challenges in the courts, in Congress, and on the 2016 presidential campaign trail. Additional aspects of reform and progress – shared savings, accountable care, meaningful use, and telehealth, to name four – will have to run in place until concrete guidance emerges from the Department of Health and Human Services. With today’s Supreme Court decision, though, one of the biggest clouds over the industry has lifted, and healthcare organizations can focus on their mission of delivering quality, efficient care with a bit less trepidation.