Supreme Court upholds Obamacare subsidies

In its second ruling in three years upholding President Obama's health-care law, the U.S. Supreme Court on Thursday turned back challengers' claims that the law barred health insurance subsidies to millions in 34 states, including Pennsylvania, New Jersey, and Delaware.

The 6-3 opinion, written by Chief Justice John G. Roberts Jr., upheld a central pillar of the Affordable Care Act and allows the administration's five-year-old initiative to get health coverage to more Americans.

The decision lifted a cloud that threatened to end coverage for millions of Americans, disrupt state insurance markets, and pressure politicians whose constituents receive the subsidies to find a way to save them.

Ending months of public anxiety and partisan conflict, the court basically ruled to leave things as they are.

Had the challengers prevailed, an estimated 6.4 million residents of 34 states - more than a half-million of them in Pennsylvania, New Jersey, and Delaware - would have lost the federal tax credits that make health insurance more affordable. Most of these consumers were projected to drop coverage, and they were expected to be followed by millions more as insurers raised rates to remain profitable.

The case turned on whether the law permits subsidies for people who purchase insurance through exchanges established by the federal government, as opposed to the states. Opponents said the law plainly stated that subsidies were available only through state exchanges.

Roberts, siding with the court's liberal wing along with fellow Republican appointee Anthony M. Kennedy, rejected that reasoning, saying the overall context of the law made clear Congress intended for subsidies to be paid through both federal and state exchanges. Roberts returned to a central principle of his time on the court - that courts must give great deference to Congress, and proceed with caution when considering whether to overturn a law.

Three years ago, Roberts wrote the majority opinion finding the law's requirement that all Americans of sufficient means purchase health insurance was permissible under Congress' taxing authority.

"In a democracy, the power to make the law rests with those chosen by the people," Roberts wrote this time. "That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done."

Justice Antonin Scalia, who wrote the dissenting opinion, was scathing in his criticism of the majority's decision.

"Today's interpretation is not merely unnatural, it is unheard of," Scalia wrote.

President Obama hailed the ruling.

"Today, after more than 50 votes in Congress to repeal or weaken this law, after a presidential election based in part on preserving or repealing this law, after multiple challenges to this law before the Supreme Court - the Affordable Care Act is here to stay," Obama said.

Republican leaders declared they would continue to fight the law. Senate Majority Leader Mitch McConnell, in a floor speech, said his party would continue to work to change it. House Speaker John A. Boehner vowed Republicans "will continue our efforts to repeal the law and replace it with patient-centered solutions that meet the needs of seniors, small-business owners, and middle-class families." Gov. Christie, expected to soon announce his bid for the presidency, also has said the law should be replaced.

Insurance experts and health policy analysts had predicted that loss of the subsidies would undermine the individual insurance markets in the 34 states and cut billions of dollars in revenue to hospitals, physicians, and health clinics, forcing them to decide between their patients' well-being and their own.

Ten times more Americans get health coverage through employers than in the individual market. But Obamacare's impact on the individual market is largely responsible for the percentage of uninsured Americans declining from more than 17 percent in late 2013 - just before the law's main provisions kicked in - to 12 percent this year, according to Gallup.

Among the newly insured expressing relief at Thursday's ruling was Pat Fagan, a 56-year-old Bucks County resident. Already a breast cancer survivor, she was diagnosed with malignant melanoma one month after purchasing insurance on the exchange last year.

"I was very worried," she said, "and thinking, 'Oh, my God, what am I going to do if this does go the wrong way for me?' "

In their briefs, the conservative legal theorists who challenged the law said that restricting subsidies to consumers who purchased insurance on "an exchange established by the state" barred assistance for residents who use the federal exchange. The provision was intended to encourage states to create marketplaces, they said.

Jonathan Adler, the Case Western Reserve University law professor who played a central role in the conservatives' legal challenge, said that Roberts had read more into the law than was apparent from the plain text.

"It is the second time that the chief justice has chosen to rewrite the law in order to save it," said Adler, who grew up in Center City and attended Friends' Central School.

The subsidies, available as tax credits that reduce monthly premiums, are critical to extending health-care coverage. They are paid to people earning 100 percent to 400 percent of the federal poverty level, or an annual income of between $24,000 and $97,000 for a family of four.

Most of the states that lack their own exchanges, as well as both chambers of Congress, are controlled by Republicans who wanted nothing to do with Obamacare. But most of the 8 million to 10 million people who were projected within a year to be affected if the court ruled against subsidies live in those states as well.

"It's not the state that doesn't get a subsidy. It is Joe Blow," Samuel Marshall, president of Insurance Federation of Pennsylvania, said last week. "It is a little harder to say to Joe Blow, 'I know you are poor . . . but we aren't going to help you.' "

With Congress gridlocked by partisanship, states could have created their own exchanges - if they could overcome their own political divisions.

Gov. Wolf, the only Democrat in the nation to replace a Republican governor this year, won conditional approval from the Obama administration last week to move forward with a state-based exchange in Pennsylvania. Delaware was the only other state relying on the federal exchange to get that far.

Within minutes of the court ruling, however, Wolf announced that his administration would scrap the idea.

"I am pleased to say that we will no longer need to rely on this plan," said Wolf, who would have needed Republican legislators to go along with the new exchange.

The ruling also likely relieves pressure on Christie, who has vetoed two bills passed by the Democratic-controlled New Jersey Legislature calling for a state-based exchange, and would have faced conservative pressure as a presidential candidate.

Roberts was joined in the majority opinion by Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor, Elena Kagan, and Kennedy. Scalia was joined in the dissent by Justices Clarence Thomas and Samuel A. Alito Jr.

Roberts described the challengers' arguments as "strong." But he argued that the overall thrust of the legislation was to provide health insurance for Americans who otherwise could not afford it.

"The act indicates that state and federal exchanges should be the same," he wrote. "But state and federal exchanges would differ in a fundamental way if tax credits were available only on state exchanges."

Scalia was acerbic in his response.

"Who would have dreamt that 'Exchange established by the State' means exchange established by the state or federal government," he wrote.