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SCOTUS schedules case on healthcare exchange subsidies

December 22, 2014
by Pamela Tabar, Editor-in-Chief
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The Supreme Court has granted a March date to hear King v. Burwell, a case that challenges one of the key aspects of the Affordable Care Act (ACA)—the tax subsidies granted to state healthcare exchanges, also called healthcare marketplaces.

At issue is the wording in the ACA, specifically the interpretation of which healthcare exchanges are “established by the State” and therefore would qualify for the tax subsidies provided by the law.  

To date, 50 states have established some sort of healthcare insurance marketplace, but only 16 of those states operate the exchanges themselves. The rest of the exhanges were created by the states but are federally operated.

The justices had decided in early November to add the case to its docket and rule on how far the federal subsidies programs could be extended. The Obama administration and most ACA supporters hold that the subsidies should apply to all state-based exchanges, whereas others interpret the wording literally, holding that the subsidies should apply only to the 16 states currently running exchanges without federal help.

Those on both sides of the issue will be watching the case carefully, as the high court's decision has the potential to alter significantly the financial equations within the ACA’s healthcare insurance initiatives.