The U.S. Supreme Court is deliberating a serious challenge to the Affordable Care Act (ACA). On Wednesday, justices appeared divided on the challenge, which takes a critical look at the tax subsidies that allow Americans to buy insurance cheaply -- particularly in states that have not created their own health insurance exchanges.
The decision could fall on the back of Justice Anthony Kennedy, a conservative justice who worries that states could be negatively impacted if the federal government does not prevail in the case. Although Kennedy has not committed to his decision, he indicated that he may choose to back President Obama and the government on the matter.
Justices Appear to Be Divided
In a 2012 challenge to the Affordable Care Act (ACA), Chief Justice John Roberts was the key decision maker, who upheld the law. He did not indicate during arguments how he might vote. Meanwhile, the four liberal justices on the panel appear to support the ACA. Meanwhile, Justices Samuel Alito and Antonin Scalia asked questions that appeared to support the challengers.
During oral arguments, Justice Alito mentioned that states would have sufficient time to reorganize and prevent negative impacts because the ruling would not go into effect until the the end of 2015. However, Justice Kennedy worries that the ACA would become unconstitutionally coercive if the challengers win and the law is only allowed to offer insurance subsidies to states that have their own health insurance exchanges. If only states with their own exchanges receive federal funding, then non-participating states would be unfairly punished. In this sense, according to one attorney on the case, if the challenging argument is accepted, it will create a larger constitutional dilemma.
Possible "Death Spiral" for Affordable Insurance
Kennedy further elaborated that doing away with subsidies for states without state-specific health care exchanges could result in what he calls an insurance "death spiral"; nevertheless, he said that the plain meaning of the law at issue could result in the challengers winning regardless of the harsh consequences.
If the Obama administration loses this case, as many as 7.5 million people from 34 states will lose their health insurance subsidies. These subsidies are helping millions of low and moderate income individuals afford health insurance -- people that may not otherwise be able to buy insurance affordably.
The Supreme Court will issue its decision on the matter by the end of June 2015.
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