Updated 4:07 PM: “Obamacare lives to fight another day,” writes David Studdert, ScD, a core faculty member at CHP/PCOR and an expert in health law, in a Stanford Law School blog post. In his piece, he offers more legal details of the ruling.
Updated 1:51 PM: Stanford law professor Hank Greely, JD, has this to say:
Today is my birthday – and the Supreme Court (or, at least, two-thirds of it) just gave me, most people who follow health policy, and millions of now still-insured Americans a present: King v. Burwell…
I do think the Court could have legitimately gone the other way, though I think it would have been foolish and harmful to the country and even to the conservatives who will now bemoan this outcome. I am glad they did not. I prefer judges who try, when the law – or more accurately its interpretative culture – will allow them to, to make things work in a sensible way. The dissent’s position would have upended a major government program and harmed millions of people for a technicality – like a… foul call deciding the Super Bowl or the World Cup. The Court could have done that, but it would have been wrong…
What does it mean about the future of Obamacare? Well, I think it means the Supreme Court is done with it, at least with its fundamental, life or death issues.
Greely will expand on these thoughts in a longer piece on Scope later today.
Updated 12:45: Mello goes into detail on the ruling in a just-published Stanford Law School blog post.
Updated 11:51 AM: Stanford’s Laurence Baker, PhD, who has done extensive research on the economic performance of the U.S. health-care system, has also weighed in, saying, “This ruling, affirming the intent of the Affordable Care Act, is a relief for millions of Americans who have gained coverage under the law. It also provides important stability for insurers and the health-care system more broadly, avoiding what would have been tumultuous disruption in health-insurance markets in many states. We can now turn full attention back to the important work of improving health-insurance markets and expanding coverage, from which this court case was such a distraction.”
Updated 11:04 AM: Some thoughts now from Stanford health economist Jay Bhattacharya, MD, PhD, a core faculty member at the Center for Health Policy and the Center for Primary Care and Outcomes Research (CHP/PCOR):
Today’s Supreme Court ruling preserves the Obama administration’s implementation of the ACA’s subsidy scheme to all qualified people (between 133 and 400 percent of the poverty line). The Supreme Court essentially ruled for the status quo.
Had the plaintiffs won the case, such subsidies would only have been legal in states, like California, that have established their own insurance exchange (or marketplace). The immediate effect of the ruling, then, would have been to eliminate federal subsidies for the people living in states without a state-established insurance exchange. Families with income between 133 and 400 percentof the poverty line in such states who purchased their insurance through a federally-established exchange would have had to pay the full costs of their insurance premiums. This would have made insurance unaffordable for many of these families.
The ruling would not have directly affected people who get insurance through their employers or through the government in some other way, such as through Medicare (health insurance for the elderly and disabled) or through Medicaid (health insurance for the poor).
It is difficult to imagine, had the ruling gone the other way, that it would be a stable political equilibrium for people in one state to be eligible for federal subsidies, while similar people in another state to be not eligible. There would have been a lot of pressure on Democrats and Republicans at both state and federal levels to reform Obamacare, and either reestablish the subsidies or make some other arrangement to make insurance affordable. With the Supreme Court ruling the way it did, there will be substantially less impetus or desire for the reform of Obamacare, especially on the Democratic side.
Updated 10:45 AM: Stanford’s Michelle Mello, JD, PhD, professor of law and of health research and policy, has just provided her insight on the ruling, which she said offered strong claims by both sides:
The Court was profoundly influenced by its desire to avoid an interpretation of the law that would defeat Congress’s purpose in passing it. That purpose was to create a functional market through which individuals could buy insurance… The Court found it “implausible” that Congress intended for States that opted not to set up their own Exchanges to suffer the foreseeable, well-understood consequence of a “death spiral.”
The spiral occurs because without the tax credits, a very large proportion of the people who would otherwise be required to buy insurance get exempted from the individual mandate because the insurance cost exceeds a set amount of their income. That means too few people — and in particular, too few healthy people — buying insurance now… People know they can buy insurance later when they get sick. Their decisions to do so push premiums up for everyone, and the adverse selection makes the market unsustainable…
The trio writing in dissent could hardly have shown greater disgust with the majority’s approach. They disputed the majority’s threshold claim that the four little words were ambiguous — and everything that followed from it. The length and complexity of the majority’s justification for its holding, they claimed, is just proof that (once again) the justices are contorting the law in order to achieve a political objective — upholding the Affordable Care Act…
But on balance, I think the majority got it right in pointing to the well-understood consequences of withholding tax credits as evidence that Congress didn’t intend the reading the challengers urged. The decision is on firm legal ground, and to public-health advocates, is an enormous relief.
9:33 AM: Millions of Americans can keep their subsidized health care, following the Supreme Court’s monumental ruling on the Affordable Care Act today. The court ruled 6-3 that subsidies available through federal insurance exchanges are legal. The 2010 law allowed each state to establish its own health insurance marketplace, or exchange, but if it failed to act, its residents could obtain subsidized insurance through a federal exchange.
More than half of the states, including many conservative strongholds, declined to establish a local exchange. Many commentators had written that if the Supreme Court ruled against the legality of subsidies on the federal exchange, millions of Americans would be priced out of the insurance market and the mandate requiring every individual to have insurance would be weakened.
The case stemmed from a dispute over the phrase, “an Exchange established by the State.” Did that phrase also grant tax credits to customers who obtained insurance through the federal exchange?
Writing for the majority, Chief Justice John Roberts acknowledged the phrase in question is “properly viewed as ambiguous” and that the act “contains more than a few examples of inartful drafting.”
Therefore, he writes the Court must interpret the law in consideration of its broader purpose:
Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the law in a way that is consistent with the former, and avoids the latter.
We’ll be adding comments on this news from Stanford experts throughout the day. Check back often.
Previously: Exploring how the Affordable Care Act has affected the number of young adults visiting the ER, Analysis: The Supreme Court upholds the health reform act (really), Stanford experts respond to Supreme Court’s decision on health law and Supreme Court mostly upholds Affordable Care Act
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