Supreme Court Uphold Obamacare Subsidies, Blocking GOP

Economy

The Republican Party has lost its biggest battle to fatally wound Obamacare, with the U.S. Supreme Court upholding federal subsidies given to millions of people who signed up in mostly red states for the president’s health care plan.


"Five years ago, after nearly a century of talk, decades of trying, a year of bipartisan debate -- we finally declared that in America, health care is not a privilege for a few, but a right for all," President Obama said at the White House. "And 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."

Conservatives had argued that a four-word phrase in the 900-page bill, requiring that government subsidies for insurance payments could only be offered through states that created insurance exchanges—not a federal government website—meant that the subsidies were illegal and had to stop. More than 6.4 million Americans nationwide receive monthly subsidies averaging $272.

“The argument that the phrase “established by the State” would be superfluous if Congress meant to extend tax credits to both State and Federal Exchanges is unpersuasive,” Chief Justice John Roberts wrote, in a 6-3 decision.

"The upshot of all this is that the phrase “an Exchange established by the State under [42 U. S. C. §18031]” is properly viewed as ambiguous," Roberts wrote. "The phrase may be limited in its reach to State Exchanges. But it is also possible that the phrase refers to all Exchanges—both State and Federal—at least for purposes of the tax credits."

The ruling is a major political victory for Obama. The Republican-controlled House has voted dozens of times to repeal Obamacare, but that has never made it into law. A cadre of red-state governors refused to implement the law, while also filing a variety of lawsuits to overturn it. Taking aim at the apparent drafting error in the federal subsidy language was the latest tactic, even though millions of residents in their states have signed up for Obamacare coverage.

Market analysts predicted that overturning the subsidies would have meant that upwards of 8 million people would have dropped their health insurance, as premiums would not only have risen for those receiving subsidies but also for many others with Obamacare. That’s because the private insurers would have adjusted rates upwards as the pool of policy holders shrunk.

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