Mon. Sep 21st, 2020

Obamacare subsidies upheld

2 min read

Supreme Court of United States- Giving a landmark judgment, the Court by a majority of 6:3 sealed
the fate of the Patient Protection and Affordable Care Act, 124 Stat. 119 by
upholding that the Act widely known as Obamacare, did not restrict the
subsidies to States that establish their own online healthcare exchanges but
extends them to States that have a Federal Exchange also. The issue in the
present case was whether the Act’s interlocking reforms apply equally in each
State no matter who establishes the State’s Exchange or whether the tax credits
are available in States that have a Federal Exchange.The Patient
Protection and Affordable Care Act adopts a series of interlocking reforms
designed to expand coverage in the individual health insurance market. First,
the Act bars insurers from taking a person’s health into account when deciding
whether to sell health insurance or how much to charge. Second, the Act
generally requires each person to maintain insurance coverage or make a payment
to the Internal Revenue Service. And third, the Act gives tax credits to
certain people to make insurance more affordable. In addition to those reforms,
the Act requires the creation of an “Exchange” in each State basically, a
marketplace that allows people to compare and purchase insurance plans. The Act
gives each State the opportunity to establish its own Exchange, but provides
that the Federal Government will establish the Exchange if the State does not. Also,
the Act provides that tax credits “shall be allowed” for any “applicable
taxpayer,” 26 U. S.
C. §36B(a), but only if the taxpayer has enrolled in an insurance plan through
“an Exchange established by the State under [42 U. S. C. §18031],” §§36B(b)(c).

The Court
observed while interpreting the phrase “an Exchange established by the State
under [42 U. S. C. §18031]” that oftentimes the meaning or ambiguity of certain
words or phrases may only become evident when placed in context, hence the
phrase may be limited in its reach to State Exchanges but it could also refer
to all Exchanges both State and Federal for purposes of the tax credits. Roberts
CJ, giving the opinion of the Court stated that although the petitioner’s
arguments about the plain meaning of the statute were “strong”, the context and
structure of the act compel to depart from what would otherwise be the most
natural reading of the pertinent statutory phrase. [King v. Burwell, 576 U. S. ____ (2015), decided on 25.06.2015]
Source: Legal news India

Leave a Reply