The U.S. Supreme Court rejected a challenge to the Affordable Care Act in a Thursday ruling upholding a key provision of the Obamacare law. By a 6-3 vote, justices said consumers qualify for a subsidy that lowers the cost of premiums whether they buy their coverage through federal or state exchanges.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter,” Chief Justice John Roberts wrote in the majority opinion.
Court observers had expected to see justices lean in favor of overturning the provision, effectively gutting the healthcare law. More than 6 million lower-income Americans who get their health insurance through the federal marketplace receive the subsidies that on average save qualifying consumers $270 a month.
The plaintiffs in the case, funded by conservative critics of the healthcare law, argued before the high court that the language in the Affordable Care Act made subsidies available only to insurance customers who bought their policies through “an exchange established by the state” where the policyholders live.
Had justices sided with that interpretation, customers who bought their insurance on the federal exchange would have lost the subsidies. Only 16 states now have their own health exchanges up and running.
The health insurance industry had warned that if the challenge succeeded, the Affordable Care Act would have entered a “death spiral” — with costs rising for a shrinking number of participants, eventually causing the system to collapse.
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