In this latest Guide to the Issue, API recaps the argument presented in King v. Burwell which the U.S. Supreme Court will rule on any day now. In this case, the Court will decide whether or not the issuance of health insurance subsidies through a national exchange was lawful under the ACA. The plaintiff’s challenge is based on the plain reading of the law that appears to limit the subsidies to policies purchased only through a state-run, not a federal, exchange.
When 36 states refused to set up an exchange, the IRS promulgated a rule allowing for subsidies to be issued through a federal exchange. Plaintiffs and otheramicus curiae claim that the IRS unilaterally disregarded the clear congressional intent and essentially rewrote the law in an act of brazen (and likely politically-driven) overreach.
An unfavorable ruling for the Obama Administration could mean the unraveling of the Affordable Care Act. Even Justice Kennedy acknowledged as much in oral arguments, opining that to strike down the federal exchange would cause a “death spiral” for health insurance under the ACA.