The Supreme Court handed the Obama administration a significant victory on Thursday, when it upheld a key provision of the Affordable Care Act that allows the federal government to keep distributing subsidies to help low-income Americans buy health insurance.
But the decision’s ramifications could be felt in the 2016 election and beyond, especially if a Republican wins the White House next year.
That’s because the Supreme Court not only ruled the federal subsidies are legal under the Affordable Care Act, but it also did not leave any ambiguity that would allow a future administration to interpret the law differently.
“The court focused definitively and said, this is what the law means,” said MaryBeth Musumeci, an associate director at the Kaiser Commission on Medicaid and the Uninsured.
The challengers in the case argued the way the law was written does not allow for subsidized insurance in states where the federal government had set up insurance exchanges. Instead, the challengers argued, insurance subsidies are allowed only in states that have set up their own exchanges. They pointed to a clause that they argued meant exchanges should be “established by the state.”
A brief history: In 2011, the IRS issued a regulation that interpreted a part of the law in question to mean that the federal government could issue the subsidies. But in its opinion Thursday, the Supreme Court majority said that decision should not be left up to a government agency to interpret, since Congress did not make that explicit in the Affordable Care Act.
Instead, the high court disregarded the agency’s interpretation and ruled on the statute on its own. It said the decision should not be left up to the agency, which means a future administration cannot change that interpretation.
“If the court had left in question about whether there should have been deference to the agency, that would have left the door open potentially for another administration running that agency to say, ‘OK, this is ambiguous language, and we have a different legal interpretation,'” Musumeci said.
Practically, this means that a theoretical future Republican president could not come in and say that the federal government cannot hand out subsidies.
That might not be a practical solution: After all, by the time a Republican president could enter into office, millions of additional people would benefit from subsidies handed out under the law. But there’s no longer even an option: The Supreme Court has definitively determined that the federal government can provide subsidies under the law.
“Because the Court has provided its own, definitive interpretation of the ambiguous statute — and held that it will not defer to the agency’s interpretation — a subsequent presidential administration (say, a Republican Administration) cannot reinterpret the statutory provision to prohibit tax subsidies in exchanges established by the Federal Government,” Chris Walker, an assistant professor at the Michael E. Moritz College of Law who clerked for Justice Anthony Kennedy, wrote Thursday.
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