U.S. Supreme Court Rules Against Health Care Challenge

The U.S. Supreme Court has just ruled against one of the most serious challenges to the Affordable Care Act—one that could have been fatal to the law.

In King v. Burwell, opponents of the ACA argued that federal subsidies for health insurance can be offered only through online exchanges “established by the state,” which is what the text of the law says. But dozens of states refused to create their own exchanges. In those places, the federal government offers insurance (and subsidies) through its healthcare.gov site.

If the legal challenge had succeeded, the government could have been forced to end subsidies to more than 6 million people, many of whom could not afford health insurance without help. It could have thrown the entire health care system into turmoil.

Chief Justice John Roberts wrote the majority opinion in the 6-3 case. He stated that the four words “established by the state” needed to be taken in context with the overall law, which was designed to improve the health care system.

The dissenters included Justices Scalia, Thomas and Alito. Scalia, who wrote the dissent, argued that it wasn’t the court’s place to fix a law if the wording was flawed. That responsibility belongs to Congress, he said.

“The Supreme Court’s decision protects the millions of small business owners, employees and self-employed freelance entrepreneurs from losing the valuable health insurance they have secured in the past 18 months,” said John Arensmeyer, founder of Small Business Majority.

“Moreover, eliminating the credits would have led to a return of “job lock,” which shackled many would-be entrepreneurs to jobs working for others rather than starting their own businesses. Employment and access to affordable health insurance historically have been tightly linked. That linkage pressures individuals to seek out and remain in jobs that provide affordable health insurance, even if they would otherwise choose to start their own business or pursue a more attractive job opportunity with a growing small business.

The National Federation of Independent Business didn’t take a position on the case, though it has been party to another challenge to the ACA.

“The Affordable Care Act doesn’t solve the health insurance crisis for most Americans, including small business owners, for whom the cost of insurance was too high before the law was passed,” said Karen Harned, executive director of the NFIB Small Business Legal Center. “For most of our members that problem has gotten worse.”