President Obama's healthcare law is heading back to the U.S. Supreme Court.
Justices on Friday agreed to review whether it was illegal for residents of 36 states to receive federal subsidies to help them purchase insurance.
Previous Supreme Court cases focused on the law's individual mandate, Medicaid expansion, and employer contraception mandate. At issue this time are the subsidies that the federal government provides for individuals purchasing insurance through Obamacare. Though the text of the law says the subsidies were to go to individuals obtaining insurance through an “exchange established by the state,” a rule released by the Internal Revenue Service subsequently instructed that subsidies would also apply to exchanges set up on behalf of states by the federal government.
As detailed previously, a ruling against the Obama administration would have a number of significant ramifications. It would mean millions of Americans receiving insurance in 36 states would be stripped of those subsidies, and on the flip side, that taxpayers could save hundreds of billions of dollars. It would mean the employer mandate wouldn't apply in those 36 states and the scope of the individual mandate would be narrowed. It would make life a lot more difficult for Republican governors politically and could lead to the re-opening of Obamacare for changes by Congress.
Panels of two federal appeals courts issued contradictory rulings on the whether this rule was legal.
In the case Halbig v. Burwell, the majority on a panel of the U.S. Court of Appeals for the District of Columbia Circuit sided with the challengers, but the full court later agreed to rehear the case en banc, and scheduled oral arguments for next month. Some had speculated that this could deter the Supreme Court from taking up the issue, but ultimately justices decided to take up a similar case, King v. Burwell, in which the Fourth Circuit Court of Appeals ruled in favor of the Obama administration.
It takes four justices for the Supreme Court to agree to hear a case.