On Friday, Nov. 7, the Supreme Court agreed to hear King v. Burwell, which most legal observers acknowledge would not only be the most significant case set before the high court since Gore v. Bush, but also the most likely way of dismantling the Affordable Care Act (Obamacare).
King v. Burwell hinges on how the court will interpret statutory language related to the act's hallmark tax credits.
The disagreement focuses on the act's requirement that states establish insurance exchanges from which low- to middle-income taxpayers who do not receive employer-provided health insurance and are too wealthy for Medicaid can purchase health insurance. Later, the law goes on to say states can opt out of establishing exchanges; in such cases, the federal government "shall establish and operate such Exchange with the State."
Seems fair enough. But then, in the act's subprovisions, the law states tax credits provided to low- to middle-income beneficiaries are based on coverage months taxpayers spent enrolled in health plans "through an Exchange established by the State." And therein lies the problem: The law does not mention exchanges established by the federal government, which, if interpreted literally, means there is no tax credit available to those enrolled in a federal exchange. This applies to 34 states that declined to establish their own exchanges. The entire law more or less falls apart at this point because those taxpayers no longer would be subject to the individual mandate to carry health insurance.