Obamacare tax credit ruling, explained with a stool

The Supreme Court of the United States has upheld the tax subsidies created by the Affordable Care Act that help patients cover their insurance premiums. The 6-3 ruling preserves health insurance for the millions of Americans enrolled through health care exchanges.

Roughly 8.7 million of the 10.2 million health care enrollees receive subsidies that average $272 to help cover insurance premiums. But 6.4 million enrollees were at risk of losing their subsidies because they live in states that did not set up their own health insurance exchanges.

"Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them," Chief Justice John Roberts wrote in the court's 6-3 opinion. "If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress's plan, and that is the reading we adopt. preserving under President Barack Obama's health care overhaul, in a ruling that preserves health insurance for millions of Americans."

The court's ruling is the second major victory for President Obama's administration in challenges to the health care overhaul. Last year, the high court struck down a challenge to the individual mandate in the law.

"Today, after more than 50 votes in Congress to repeal or weaken this law, after a presidential election based in part on preserving or repealing this law, after multiple challenges to this law before the supreme court, the Affordable Care Act is here to stay," President Obama said.

Read the court's opinion at http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf 

The case

The issue in King v. Burwell is whether the Affordable Care Act's tax credits are available in states that use the Healthcare.gov federal exchange rather than a state exchange, like MNsure.

The ACA says tax credits "shall be allowed" for any "applicable taxpayer," adding that the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through a state exchange.

"The IRS addressed the availability of tax credits by promulgating a rule that made them available on both State and Federal Exchanges," Chief Justice Roberts wrote. "As relevant here, the IRS Rule provides that a taxpayer is eligible for a tax credit if he enrolled in an insurance plan through an Exchange,' which is defined as ‘an Exchange serving the individual market . . . regardless of whether the Exchange is established and operated by a State . . . or by HHS.'"

Currently, 16 states and the District of Columbia have established their own exchanges, while 34 states have elected to use Healthcare.gov.

Minnesota reaction

Sen. Amy Klobuchar (D-Minn.) "Millions of Americans can breathe a little easier today knowing that the health care they count on has been affirmed by the highest court in our land. The Supreme Court's decision will allow 6.4 million Americans to maintain the health care coverage they need. Now that the Supreme Court has spoken, we must keep working to ensure that the Affordable Care Act helps families across the country with access to the high-quality health care that they deserve."

Sen. Al Franken (D-Minn.): "The Supreme Court made the right decision today by again upholding the Affordable Care Act," said Sen. Franken. "This is a huge victory for millions of people across the country who can continue to have access to affordable health coverage. We know that the Affordable Care Act is working: people with pre-existing conditions can't be denied coverage, women can't be charged more than men for health insurance, young Americans can stay on their parents' insurance plans until they're 26, and there's no more cap on lifetime and annual limits. And in Minnesota, the uninsured rate has dropped by over 40 percent, and now 95 percent of people in our state have health insurance. This is a good day for the people of Minnesota, and it's a good day for all Americans. It's time for us to put this debate behind us and move forward."

Rep. Erik Paulsen (R-Minn.): "Today's Supreme Court ruling does not change the fact that the President's health care law has meant fewer options and increased costs for hardworking Americans. We still need better patient-centered solutions to help families that face barriers in accessing affordable, quality care. For instance, repealing the burdensome medical device tax would spark innovation and increase investment in critical life-saving and life-changing products."

Rep. John Kline (R-Minn.): "The President's health care law has led to higher costs, fewer jobs, and tremendous uncertainty for families and small businesses. Today's decision does not change the fact that the law is fundamentally flawed, and it doesn't change our resolve to repeal it. Our nation desperately needs a patient-centered health care system, one that provides working families and employers more choices, greater flexibility, and affordable coverage. That is precisely what we will continue to fight for on behalf of the American people."

Rep. Tim Walz (D-Minn.): "The goal of the Affordable Care Act is to provide all Americans with health care. It simply doesn't make sense, nor was it the authors' intent, to provide subsidies only to people in states that created their own exchanges, and I'm glad the Supreme Court agreed. While the law is not perfect, it is working; more Americans have health insurance today than ever before. Since the Affordable Care Act was signed into law, the nationwide uninsured rate has been cut by about 30 percent. In Minnesota, the effects have been even more profound, cutting the uninsured rate nearly in half, from 8.2 percent to 4.9 percent. In other words, because of the Affordable Care Act, 95 percent of Minnesotans now have health insurance. Health care reform is a journey, not a destination. As we move forward, there will likely need to be improvements and changes to the law along the way. While I will work with anyone who is genuine in their attempts to improve the law, I will fight vigorously against repeal and sending us back to the days when seniors were forced to choose between buying groceries or filling their prescriptions, when being a woman was considered a ‘pre-existing condition,' and when students got kicked off their parents health care the day they graduated. We must keep moving forward."

State Sen. David Hann (R-Eden Prairie): "Today's ruling makes it clear Minnesota never should have wasted nearly $250 million taxpayer dollars building the defective MNsure system we have now. Democrats' promises about hassle-free enrollment, affordable insurance, and better healthcare have been continually broken since the rollout of their state exchange. The reality is Minnesotans are being hurt by MNsure daily. It has done nothing to curb healthcare costs, and insurers are predicting premiums will increase by 11-74% next year alone. Audits have shown widespread mismanagement of the exchange, and consumers report continuing enrollment headaches, long delays to receive care, and fewer available health insurance options. Even Governor Dayton, who championed the exchange from day one, has acknowledged its rollout as the "biggest disappointment" of his first term. But despite years of failure, Democrats have continued to defend Obamacare and block common sense reforms to MNsure."

State Rep. Tara Mack (R-Apple Valley): "Today's decision is an opportunity for Minnesota to put an end to the headaches MNsure is causing Minnesota families. Democrats should join us in pursuing bipartisan reforms to save precious taxpayer dollars while giving Minnesota families a more user-friendly experience in their efforts to find affordable health plans that work for their families. With over $250 million already wasted on the broken MNsure website, it's time to stop throwing good money after bad."

Republican Party of Minnesota: "In Minnesota, Obamacare has wasted over $250 million dollars of hard-earned taxpayer money on the failed MNsure system, and it has resulted in healthcare cost increases of over 50% in many cases. Democrats told us your healthcare costs would go down $2,500 per year, but it's quite clear now, if Minnesotans want to fix the cost of their healthcare, then in 2016 we need to elect a Republican President and a Republican majority in both the Minnesota House and Senate. Minnesota Republicans have put forward free market healthcare solutions that work and will cut costs, but Democrats continue to say no. To pass healthcare solutions that work, Minnesota needs to elect a Republican House and Senate in 2016."

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