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Affordable Care Act Subsidies Remain the Law of the Land

By a vote of 6 to 3, the U.S. Supreme Court ruled today that the Affordable Care Act (ACA) subsidies received by low and middle-income Americans through a federal health care exchange are constitutional.

The legal case, King v. Burwell, argued that four words in the legislation, “established by the state,” would disqualify over 6 million Americans who received their subsidies from a federal exchange.

That’s because the ACA defined a health exchange as “an agency or entity set up by the state.” Yet 32 states did not set up their own insurance exchanges. Instead, they defaulted to the federal exchange.

Nationwide, 87% of Americans who bought insurance on the exchanges received subsidies to offset the cost of premiums. Striking down this key provision would have had the greatest impact on states that chose not to create their own state exchanges. However, health care experts say it’s likely that all health care insurance premiums would have risen. 

The reality of taking away subsidies from Americans, resulting in the subsequent loss of an affordable source of health insurance, would have triggered a major upheaval across the U.S.

“The Court focused on interpreting the intent of Congress, which was to create a health insurance marketplace for every eligible American, either through state exchanges or a federal exchange, and provide incentives for low and moderate income families to help make their insurance coverage more affordable,” says John Crabtree, Center for Rural Affairs, Lyons, Nebraska.

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