Wednesday, November 12, 2014

ACA Litigation Heads to US Supreme Court

Dianne De La Mare


The US Supreme Court has agreed to review the legal challenge in King v Burwell (most likely in March 2015) and to decide whether or not the Obama Administration is improperly providing tax subsidies to consumers who purchase insurance through the Federal Exchanges (in more than 30 states). This will mark the third time that the US Supreme Court will hear litigation focusing on the Affordable Care Act (ACA), and casts a cloud on the tax subsidies issues as the second round of open enrollment for insurance through the Exchanges is set to begin. In 2012, the US Supreme Court upheld the constitutionality of the ACA but also found the Medicaid expansion provision unconstitutionally coercive to the states, leaving Medicaid expansion optional for the states. Then earlier this year, the Court carved out an exception for providing contraceptive coverage for employers who object for religious reasons.

Now, in agreeing to hear King v Burwell, the US Supreme Court will review the lower court (US Court of Appeals for the Fourth Circuit) decision that upheld the subsidies for the Federal Exchanges. Recall that on the same day that the Fourth Circuit released its decision, a panel of the US Court of Appeals for the District of Columbia (DC) Circuit struck down the subsidies. The full DC Circuit was poised to reconsider this matter in December but now pending the US Supreme Court review, this action has been put on hold. Depending on how the US Supreme Court rules on this matter, their final decision could seriously dismantle the ACA. 

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