Back to the Network Blog

King v. Burwell: The Supreme Court Decision and the Future of the Affordable Care Act

posted on Wed, Jul 8 2015 12:51 pm by Jane Perkins

Over the past few months, there have been countless assessments of the potential impacts of the pending decision in the King v. Burwell Supreme Court case on the Affordable Care Act (ACA). Many believed a ruling in favor of the plaintiffs would signal the end of the ACA.

On June 25, the Court upheld by a comfortable six to three margin, a key element of the ACA: the ability of millions of low- and middle-income individuals, nationwide, to use any exchange established under the ACA to enroll in a health plan and obtain financial assistance to pay their health insurance premiums.

By now, the issue in King .v Burwell is well-known: What did Congress mean in the ACA when it used the phrase “Exchange established by the State” in a provision addressing the availability of tax credits for payment of insurance premiums? The federal Department of Health and Human Services’ regulations had determined that this could include not only state-run exchanges, but also the exchange operated by the federal government. Writing for the majority, Chief Justice Roberts did not defer to the regulation, but instead answered this question by applying well-established rules of statutory construction. Thus, rather than assessing the phrase in isolation, the Court looked at the text and structure of the ACA to determine its meaning. The Court’s majority decided that Congress did not intend to foreclose the availability of premium assistance for individuals based on whether they happened to live in a state that is operating the exchange or in a state that has left operation of such exchange to the federal government. The Court reached the conclusion that Congress did not intend to bar individuals in federal exchange states from premium assistance—Congress would not have buried such an critical feature of the ACA mid-way into a 900+ page law that repeatedly stated that its purpose was to insure all Americans.

The Court’s decision provides some important takeaways. First, the separation of powers between the three branches of government is constantly in play. By refusing to defer to the federal agency’s interpretation of the ACA provision (although ultimately agreeing with the agency’s conclusion), the Supreme Court reaffirmed its role as the final arbiter of all things legal. And with respect to the tax credits themselves, the decision means that a subsequent Administration cannot change the availability of premium assistance tax credits by issuing a regulation; that change must come from Congress.

Second, King has settled the options that are available to the states. In a post-King world, some states that are currently operating their exchanges could shift the responsibility to the federal government. This will place added pressure on the federal exchange to get it right and, unfortunately, even after overcoming the botched roll out, the federal exchange has continued to face problems—including with tracking information received from applicants and, in turn, communicating decisions to them on the information received.

Third, the ACA envisioned expanded Medicaid coverage for adults with income below 138 percent of the poverty line. The King ruling could cause at least some of the 27 states that have not expanded Medicaid to look more seriously at doing so.

Finally, there could be an effect on other litigation that is aiming to bring down the ACA. Three other cases (filed in federal courts in DC, Indiana, and Oklahoma) that raised the issue decided in King will presumably go away. However, other challenges remain, among them: Two appellate courts have rejected arguments that the ACA is unconstitutional because its enactment violated the Origination Clause (which requires bills that raise revenue to originate in the House of Representatives). Four appellate courts have rejected arguments by challengers that the ACA’s contraceptive coverage requirements violate their religious freedoms. Yet to be decided is a case filed by members of the House of Representatives who argue that the Administration illegally paid cost-sharing reductions to insurers without an express appropriation. King may or may not signal the end of this massive and costly litigation effort that, since enactment of the ACA in 2010, has produced hundreds of cases.

This blog post was prepared by Jane Perkins, Legal Director, National Health Law Program, and Senior Attorney, Network for Public Health Law — Southeastern Region.

The Network for Public Health Law provides information and technical assistance on issues related to public health. The legal information and assistance provided in this document does not constitute legal advice or legal representation. For legal advice, readers should consult a lawyer in their state.

Support for the Network is provided by the Robert Wood Johnson Foundation (RWJF). The views expressed in this post do not necessarily represent the views of, and should not be attributed to, RWJF.

blog comments powered by Disqus