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Obamacare Survives Second Supreme Court Challenge

June 25, 2015

By Scott J. Wenner

The Affordable Care Act has survived another serious challenge – again through an opinion authored by Chief Justice Roberts. Today’s 6 to 3 Supreme Court decision in King v. Burwell held that the Administration’s interpretation, via an IRS rule, of an ambiguous, “ancillary” provision of the law was a permissible one, especially as “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”

Specifically at issue was whether the Administration could continue to subsidize health insurance purchased by those with low incomes in states that had refused or failed to establish their own exchanges. The challengers had argued that the literal language of law made insurance subsidies available only where the coverage was purchased on an insurance exchange “established by the state.” In a nutshell, the majority disposed of this argument by (i) declaring the language of the quoted section ambiguous; (ii) observing that insurance subsidies were crucial and necessary nationwide, regardless of whether a state exchange is available in a particular state, in order for the law to work; and (iii) concluding that an interpretation that would prompt the destruction of healthcare markets would hardly fulfill the purpose of Congress in passing the Affordable Care Act.

Justice Scalia authored a scathing dissenting opinion. In it he accused the Chief Justice of failing to apply traditional rules of statutory construction in order to preserve the healthcare law.  In the peroration of his dissent, Justice Scalia, mindful that this was Justice Roberts’s second rescue of Obamacare, and having accused the Chief Justice of tortured reasoning in both instances, observed: “We should start calling this law SCOTUScare.”  Indeed.

For more information regarding this or other labor and employment issues, please contact Scott J. Wenner, past chair of Schnader’s Labor and Employment Practices Group. 

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