Supreme Court Ruling Gives ACA Tax Credits to All

Time: June 27th  2015   Copy editor: Tyrefull

For the second time in three years, the U.S. Supreme Court upheld a core component of the Affordable Care Act, this time ruling that the program allows tax credits in all 50 states, not just those 16 states with their own online insurance exchanges.

The Court’s 6-3 ruling ends another legal challenge to the ACA, and effectively prevents a “collapse in state insurance markets,” according to experts.

Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan joined Chief Justice John Roberts’s majority opinion. Justices Antonin Scalia, Samuel Alito and Clarence Thomas dissented.

"Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Roberts wrote for the majority. On the other side was Scalia’s dissent, which called the majority’s reasoning “quite absurd” and “interpretive jiggery-pokery.”

At issue was a four-word phrase in the 2,000-page law, which says that people gain tax credits when they buy health insurance on an exchange “established by the state.” One side believed defined “state” as an individual state, while defenders of the ACA insisted that “state” meant the entire U.S. and that residents in all 50 states are granted tax credits under the ACA.

The ACA created the health insurance exchanges to allow those without insurance to shop for individual plans. Some states – 16 in all – established their own exchanges, while the other 34 deferred to the U.S. government to run the exchanges. A negative ruling by the Supreme Court would have impacted more than six million people and have caused turmoil in insurance markets. 

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