Supreme Court To Take Up Key ACA Court Challenge This Year

November 07, 2014

The U.S. Supreme Court has agreed to consider a challenge to the legality of whether premium subsidies for purchasing health insurance in federally established exchanges are allowed under the Affordable Care Act.  By adding the case (King v. Burwell) to its docket without waiting for further action in lower federal courts as the Obama administration had asked, the high court assured that it would rule on the case before July 2015.  A ruling against the government would significantly disrupt the ACA by effectively making coverage purchased in 36 federally run exchanges unaffordable for millions of Americans, thus ensuring a major debate over the ACA in the newly elected Congress.  States with federally run exchanges would likely face new calls to set up their own ACA exchanges in order for their citizens to be eligible for the federal premium subsidies.  Another option is that a state could deem the federal exchange as its own and authorize the federal government to run it.  States might also invoke an ACA provision that lets them propose alternatives to the exchanges and get waivers from the federal rules starting in 2017.  However, a number of states are unlikely to take such action.  Recent media reports note that some insurers appear to be making contingency plans should the plaintiffs prevail in King.