High court preserves all ACA subsidies

The U.S. Supreme Court, in a 6-3 ruling Thursday, upheld the Affordable Care Act subsidies that have helped millions of Americans, including 412,000 Georgians, obtain insurance coverage.

John Roberts
John Roberts

The ruling was hailed as a huge victory for President Obama and for the ACA, although the constitutionality of the 2010 law was not in dispute in this case.

The justices ruled that federal subsidies can be offered in insurance exchanges run by the federal government, as they are in Georgia and 33 other states.

The plaintiffs in the case argued that the health law did not permit such subsidies in states that have federally operated exchanges. The pointed to the ACA’s language, which says the subsidies are available through an exchange that was “established by the State.”

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts wrote for the court’s majority. “If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

Roberts was joined by the court’s four more liberal justices, and by Justice Anthony Kennedy. The court’s three most conservative justices dissented.

Justice Antonin Scalia called the result “quite absurd,” and said it shows the high court “is prepared to do whatever it takes to uphold and assist” the other justices’ favored laws.

A decision against the Obama administration would have probably led many people now getting subsidies to have to drop coverage and become uninsured.

One such person is Nathan Tavel of Atlanta, who came off his parent’s health plan three months ago, picking up coverage on the insurance exchange.

Tavel pays just $15 a month, an amount that was reduced considerably by a subsidy of $183 per month.

He’s a sign painter, and is still paying off student loans, so there’s not a lot of extra money floating around.  “The subsidies are helping a lot of people who wouldn’t be covered otherwise,” he said last week.


The average subsidy per enrollee in Georgia is $274. The increase in the average premium if subsidies were not available has been estimated at 381 percent.

The South, with high numbers of people getting subsidies in the exchange, would have been hit hardest by a decision for the plaintiffs.

A study by the American Academy of Actuaries offered a gloomy forecast of what could happen under a decision against the administration. “An immediate or near-term elimination of federal premium subsidies would cause massive disruption in the individual market. Potentially millions of people would drop coverage, and the average costs of those remaining insured would soar.”

It could lead to a  death spiral, which occurs when healthy people drop out of an insurance pool, leaving sicker people to pay increasingly expensive prices for care.

Georgia and several other states have erected an additional hurdle on the exchange issue. Last year, the Georgia Legislature passed a law prohibiting the state from running its own exchange.

A decision striking down the subsidies would have set up a challenge for the Republican-led Congress and for Gov. Nathan Deal and the Republican political leadership in Georgia to make a legislative fix, or permit people to lose subsidies.

Gov. Deal told The Atlanta Journal-Constitution recently that the state wasn’t preparing a “Plan B” in case the tax credits were declared unconstitutional.

A CBS News/New York Times poll this month found that seven in 10 said the Supreme Court should rule to continue this financial assistance. Half of Republicans, however, disagreed.

Uninsured problem remains

The decision is good news for people like Reginald Mundy, 45, of East Point, who lost his sales job about a month ago. He picked up exchange coverage, and is paying about $50 with more than $100 in subsidies.

“I’m still looking for a job,” he said recently. “I’m trying to get on my feet.”

Without the inexpensive coverage, Mundy said, “I’d be up the creek without a paddle.”

The battle for the ACA is not over, though, either in Georgia or nationally. A Republican victory in the 2016 presidential election could put the health law in play for major changes.

And Georgia still must grapple with its high rate of uninsured – about 20  percent, and possible solutions to that problem.

“Today’s Supreme Court decision gives more than 400,000 Georgians peace of mind that they will continue to have access to vital health care services without the fear of an unexpected medical condition resulting in financial disaster,’’ said Earl Rogers, president of the Georgia Hospital Association. “This ruling also allows Georgia policymakers to focus their efforts on a solution to ensure health care coverage for the hundreds of thousands of Georgians who remain uninsured.”

One potential tactic to lower the number of uninsured is to expand the Medicaid program in the state. But Gov. Deal and state legislative leaders have rejected that step, saying it’s too expensive.

President Obama, appearing in the White House Rose Garden with Vice President Joe Biden, welcomed the high court ruling.

“Today, after more than 50 votes in Congress to repeal or weaken this law, after a presidential election [in 2012] based in part on preserving or repealing this law, after multiple challenges to this law in front of the Supreme Court, the Affordable Care Act is here to stay,” Obama said. He compared the health law, which many call Obamacare, to landmark federal programs such as Social Security and Medicare.

The president said it’s important now to get more states to expand Medicaid under the ACA, a task that was made more difficult by a 2012 Supreme Court ruling, which affirmed the right of states to opt out of expansion.

Republicans nationwide generally continue to support repeal of the ACA. On Thursday, several GOP presidential candidates called the court decision legally unsound and reiterated their opposition to the ACA.

House Speaker John Boehner (R-Ohio) said there had been discussions in Congress about what to do if the court threw out the subsidies, but now that issue is moot. “Obamacare is fundamentally broken … today’s ruling doesn’t change that fact,” Boehner said.

The speaker said Republicans will continue to try to “protect” Americans from the effects of the health law.

Sam Olens
Sam Olens

State Attorney General Sam Olens expressed his disappointment Thursday on the King v. Burwell ruling.

“By permitting President Obama to ignore and rewrite important provisions of the Affordable Care Act, the Supreme Court has threatened our constitutional structure, which has always been understood to give Congress—and only Congress—the power to enact and amend the laws of our nation,’’ Olens said. “Today’s Supreme Court ruling is a loss for everyone who cares about the Constitution and the rule of law.”

Georgia State law professor Erin C. Fuse Brown said the decision is “a huge victory for the millions of people who are receiving subsidies on the federal exchange, the government, and for the health care industry that would have been destabilized by a contrary ruling.”

“The ACA is now here to stay,” Fuse Brown said. “It will be very difficult to undo the ACA moving forward.”

Consumer advocacy groups in Georgia praised the ruling.

“Today’s ruling is a big win for health care consumers: Nearly half a million Georgians are breathing a sigh of relief that they can keep their coverage and the financial peace of mind and access to care it brings,” said Cindy Zeldin of Georgians for a Healthy Future.