Why Supreme Court is likely to uphold Obamacare subsidies

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The Supreme Court is likely to hear a case on whether Affordable Care Act subsidies are legal when obtained outside state exchanges. (AFP)

The Supreme Court is likely to hear a case on whether Affordable Care Act subsidies are legal when obtained outside …

On Wednesday, two federal courts offered very different rulings on whether the federal government can legally provide health care subsidies to individuals in the 36 states without access to a state exchange site created under the Affordable Care Act.

The conflicting rulings mean that the Supreme Court is likely to hear the case, which spells the imminent demise or secured future of Obamacare, depending on which sites you frequent for news.

But SCOTUS blog author Tom Goldstein says the Supreme Court justices are likely to uphold the subsidies portion of the ACA. Goldstein’s take is particularly important because his blog’s track record of covering and predicting Supreme Court decisions has been lauded by a number of independent organizations. The blog was one of the few outlets to accurately forecast the Supreme Court’s landmark 2012 decision that upholds the basic tenets of the ACA.

"If the Supreme Court does step in, I think that the administration will win," Goldstein writes in a new post. "But it will be close. There is a good chance that the case will be decided by the same thin five-to-four majority that upheld the constitutionality of the ACA two years ago."

Interestingly, Goldstein isn’t making an argument in favor of subsidies. In fact, he writes that he thinks the language Congress used in writing the law actually limits the subsidies to be provided only when insurance was obtained through a state exchange. But he says in cases where there is some ambiguity, the court typically sides with the White House in allowing them to set specific policy implementations:

The key point is that the challengers can win only if the ACA is clear; if not, then the administration gets to interpret it. Personally, I think that the better reading of the literal text of the law is probably that Congress limited the tax subsidies to purchases on state exchanges. But I don’t think you can fairly say that the statute’s meaning is obvious. Instead, like a lot of massive laws that include lots of compromises, it is a bit of a mess. And its context suggests the administration is actually right.

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The Affordable Care Act federal exchange site (Fiscal Times)

The Affordable Care Act federal exchange site (Fiscal Times)

If challengers file a petition with the Supreme Court by November, the justices could hear the case before the current term ends. But Goldstein says the high court is more likely to wait until the Obama administration has requested a full review from the D.C. Circuit Court.

And Goldstein says that delaying any potential Supreme Court case for another year is likely to add another factor working in the ACA’s favor:

“Time is probably on the administration’s side, because as a practical matter the courts will be less and less likely to strike down the subsidies as more and more Americans get the benefit of them to buy health insurance.”

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