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U.S. Supreme Court will hear ACA subsidies case
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U.S. Supreme Court will hear ACA subsidies caseOn Nov. 7, the U.S. Supreme Court decided it would hear a case concerning the health insurance subsidies provided to millions of Americans under the Patient Protection and Affordable Care Act. A June 2015 decision is expected in the case of King v. Burwell, which challenges the Internal Revenue Service’s authority to regulate tax-credit subsidies for coverage purchased through health insurance marketplaces established by the federal government (such as the Michigan health insurance marketplace). Nationwide, more than four out of five people who have received coverage through a federal marketplace are getting a tax credit.

The ruling comes after individuals and small businesses sought review of a July decision by the U.S. Court of Appeals for the Fourth Circuit that upheld an IRS rule stating that all marketplace buyers, regardless of whether they use a federally facilitated or state-run marketplace, may be eligible for tax credits, or subsidies, to help them afford coverage (The "IRS Rule"). Central to the challenge is the language of the law, which states that subsidies will be offered in marketplaces “established by the state.” Despite this language, the Fourth Circuit ruled against the challengers, saying that the contested phrase was open to multiple interpretations and could apply to both federally facilitated and state run exchanges.

Numerous other federal courts around the country have disagreed with the Fourth Circuit, finding that the IRS Rule was contrary to the plain language of the Affordable Care Act and, therefore, invalid.

This pending U.S. Supreme Court decision has been characterized as one of the most significant challenges the Affordable Care Act has faced since its initial passage, many believe that a decision to strike down subsidies would amount to be a crippling blow to the law. If the U.S. Supreme Court sides with the plaintiffs, then subsidies will not be available in 36 states that lack their own marketplaces.

If you have questions related to how the U.S. Supreme Court's ruling may affect you, please contact a Foster Swift health care attorney.

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