The U.S. Supreme Court’s decision Friday to take up a case challenging the subsidies in the Affordable Care Act’s exchanges could wind up having a huge impact in Georgia.
The federal subsidies help millions of Americans afford health insurance offered in the exchanges, which were created as part of the health reform law.
According to the plaintiffs, those subsidies are improperly being given in the more than 30 states, including Georgia, that have decided not to run their own insurance exchanges. The federal government runs the exchanges in those states.
If the Supreme Court strikes down subsidies in federally run exchanges, it almost certainly would cause those marketplaces to collapse unless the states step in to run them.
In Georgia, however, that is not legally possible. This year, the Georgia General Assembly passed legislation that bars the state from running an ACA exchange. That prohibition was among other anti-Obamacare provisions that were signed into law.
More than 310,000 Georgians enrolled in the state’s federally run exchange this year, with the vast majority receiving subsidies or discounts to help them afford the coverage.
The state’s Republican-dominated political leadership has long been against the ACA. For instance, Georgia has opted not to expand the state’s Medicaid program, which the health law encourages. The re-election of Gov. Nathan Deal on Tuesday dealt a blow to proponents of expansion. (State Sen. Jason Carter, Deal’s unsuccessful challenger, backed expansion, though it was not a top issue in the campaign.)
The subsidy case will be the second major Supreme Court case involving the 2010 health law. In 2012, the justices upheld the ACA, though they weakened its Medicaid expansion provision by affirming the right of states to opt out.
The central issue in the latest case is an ACA provision limiting subsidies to “an exchange established by the state,” the New York Times reported.
The challengers say that language means subsidies are only for people in states that run their own exchanges. Congress made the distinction, they contend, to encourage states to participate.
The IRS has issued a regulation saying subsidies are allowed whether the exchange is run by a state or by the federal government, but the challengers say that regulation is at odds with the law.
Washington lawyer Michael Carvin, representing individuals in Virginia who objected to the subsidies, told the court in his brief that it had to act quickly, the Washington Post reported.
If his side is correct, Carvin said, “it means millions of people are ineligible for subsidies and exempt from the ACA’s individual mandate penalty. It means hundreds of thousands of employers are free of the act’s employer mandate,” the Post reported.
He added: “And it means that the IRS is illegally spending billions of taxpayer dollars every month without congressional authority.”
Representative Nancy Pelosi, the House minority leader, said the court’s move was a surprise, the New York Times reported. “It’s troubling that they would even consider this,” she said. “The language is very clear. The intent of Congress is very clear.”
The court’s acceptance of King v. Burwell follows a unanimous decision by a panel of the U.S. Court of Appeals for the 4th Circuit that sided with the Obama administration.
In a separate case involving the same issue, a panel of the U.S. Court of Appeals for the D.C. Circuit ruled 2-to-1 for the challengers. But the full D.C. Circuit put that ruling aside to let all the court’s judges weigh in, and the argument was scheduled for December.
The Obama administration said it would mount a strong defense in the Supreme Court.
“This lawsuit reflects just another partisan attempt to undermine the Affordable Care Act and to strip millions of American families of tax credits that Congress intended for them to have,” said Josh Earnest, the White House press secretary. “We are confident that the financial help afforded millions of Americans was the intent of the law and it is working as Congress designed.”