Supreme Court to Rule on ACA Premium Tax Credits

Written by: Christina Merhar
Originally published on November 10, 2014. Last updated July 9, 2015.

The U.S. Supreme Court has agreed to review a challenge to the Affordable Care Act's premium tax credits, a critical aspect of the health reform law meant to help individuals and families find affordable health insurance. Supreme Court Hearings on ACA Tax Credits

On Friday, the Supreme Court announced it will review King v. Burwell, the case in which a three-judge appeals court panel in Richmond ruled unanimously that Congress intended for the premium tax credits to be available nationwide. Oral arguments will be held next year, with a ruling by June or July.

Background on the Premium Tax Credit Hearings

The legal argument is with the wording of the health care reform law that says individuals qualify for the tax credits when they buy insurance on a marketplace “established by the state.” Only 16 states set up their own state-run marketplace (see this marketplace directory), with the remaining states relying on the federally run marketplace,

The question is: Based on this wording, should the premium tax credits only be available in states with a state-run marketplace?

Those who say "yes" argue the wording of the law limits the availability to the tax credits only to state-run marketplaces.  According to the SCOTUS Blog, that argument failed in the U.S. Court of Appeals for the Fourth Circuit, in the ruling now under review.  It was accepted in the U.S. Court of Appeals for the District of Columbia Circuit, but that ruling has now been set aside while the full D.C. Circuit reconsiders the issue.

Those who say "no" argue that the wording of the law is a drafting error; that lawmakers' intention was to offer the premium tax credits in every state, regardless of the type of marketplace.

More than 5 million Americans would be affected if the tax credits are struck down. In 2014, premium tax credits reduced monthly insurance premiums by 76% for those who qualified, with the average monthly premium decreased from $346 to $82.

See related articles on the premium tax credit rulings:

Originally published on November 10, 2014. Last updated July 9, 2015.


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