Supreme Court Sets March 4 as Date to Hear Challenge to ACA Subsidies

The most important case since the Supreme Court upheld the constitutionality of the Affordable Care Act will determine the law's ability to function in states without their own exchanges.

Oral arguments in King v. Burwell will be heard March 4, 2015, according to a spokesperson for the US Supreme Court, who confirmed the state this afternoon. The case represents the most serious challenge to the Affordable Care Act since the high court affirmed its constitutionality in June 2012.

In King v. Burwell, the justices must determine whether the law allows those who receive coverage through the federal exchange, HealthCare.gov, to continue to receive premium subsidies despite a drafting error that appears to limit subsidies to those whose states set up their own exchanges.

To the surprise of drafters of the law, 36 states opted against setting up exchanges, which would render the law unable to effectively function of consumers in all those states were no longer able to receive assistance in paying premiums.

Tax credits are available to Americans who enrolled “through an exchange established by the state.” Challengers to the ACA argue that language means consumers who live in states without their own exchanges are ineligible to get the tax credits. So far, most states without exchanges have not moved to create them, the exception being an effort underway in Florida, whose primary objective is to expand Medicaid to those up to 138% of the poverty line.

Obama Administration officials, as well as the IRS, have asserted that the law’s creators clearly intended to offer coverage to as many people as possible, and that other sections of the law indicate that subsidies are permitted in states served by the federal exchange.

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