King V. Burwell is a lawsuit that challenges the legality of subsidies issued by the IRS on behalf of HealthCare.Gov under the Affordable Care Act (ObamaCare). If the Court sides with the plaintiffs (King) instead of Burwell (the HHS secretary), millions of people will lose their health insurance.
- You can get up-to-date information on the King V. Burwell case on the SCOTUS blog.
- On March 4th King v. Burwell will be heard by the Supreme Court. This lawsuit questions whether Federal health insurance subsidies are legal or not. Get up-to-date coverage of the oral arguments here.
Here are the basics of what you should know about King v. Burwell:
- This case is one of many that challenge the legality of subsidies, but, essentially, its the only case that has actually made it to the supreme court. Since all the lawsuits are so similar, they will all likely live or die by this ruling.
- Opponents know that the key to “breaking ObamaCare” is “breaking” subsidies, mandates, and non-discrimination (not charging women more than men, discrimination based on health, etc). This lawsuit was funded by opponents of the law for this purpose (yes, that is legal and many other lawsuits are funded this way).
- Congress doesn’t have the power to force a state to create an exchange (exchanges are health insurance marketplaces used to issue subsidies).
- Since a state can’t be forced to set up an exchange, the law (PPACA / Affordable Care Act / ObamaCare) allowed for the Federal government to set up an exchange for state’s that didn’t (HealthCare.Gov).
- Critics of the law say that the wording was purposely ambiguous to urge “play ball” and set up exchanges.
- The law never specifically says that the federal government can issue subsidies through the exchange they set up for the state. It only says that states can issues subsidies (even though essentially right after that it says the Federal government can set up the exchange for states).
- The IRS later clarified that, “the Federal government can issue subsidies”. The lawsuit challenges that they didn’t have the authority to do this.
- The lawsuit says that, “since it doesn’t say it specifically, the IRS had no right to clarify, and subsidies can only be offered by state exchanges themselves. Therefore, Healthcare.Gov and the 34 states that use it are breaking the law.”
- States depended upon HealthCare.Gov to set up their exchanges for them. For instance, a state like Oregon tried to set-up their own Marketplace, couldn’t get it right, and defaulted to HealthCare.Gov in good faith that subsidies would be issued to Oregonians.
- The lawsuit is suspiciously backed up by a cast of characters that sort of seemed cherry picked for show.however, almost all of the plaintiffs are unaffected by the law. In oral arguments the justices brought up this case. However, only one of the 4 plaintiffs actually need to show they were affected.
- Both the states and the people involved with the case seemed to have moved forward with supporting a federal exchange because they interpreted the law as allowing for Federal subsidies.
- If subsidies are declared illegal, 8.2 million Americans may lose access to subsidies.
- In state’s that support ObamaCare the fixes are easy and numerous, but also expensive. The most simple answer being for affected states to set up a state exchange and transferring everything over.
- The issue is, in very anti-ObamaCare state’s, where certain state politicians have been creeping in, and anti-ObamaCare support is strong… State’s will most likely refuse to set up exchanges.
- So we risk a divided country where a core group of states rejected Medicaid (already done) and may reject subsidies (we can assume essentially the same states will do this), while the rest of the country expands and reforms healthcare under the PPACA.
The long story short, the latest battle to repeal ObamaCare at a state level begins March 4th when the first arguments are heard, but we won’t know the outcome until at least June.
If the ruling is against subsidies, then we are one step closer to the ALEC based model of healthcare reform (essentially healthcare reform with less subsidies and less regulations which favors businesses) and one step away from the PPACA (healthcare reform with subsidies and regulation which favors people).