“Exchange established by the state.”
Those five words buried in the Affordable Care Act will play a pivotal part in a Supreme Court case on the federal government’s authority to subsidize health coverage for 6.4 million people.
A legal brief issued late Wednesday by plaintiffs in King v. Burwell argues that small phrase allows only residents in states that set up their own insurance exchanges to receive federal subsidies. The residents in 36 states that have federally established exchanges aren’t eligible for the subsidies, according to the brief.
“The government is manipulating language, purely, simply and without justification,” said Sam Kazman, general counsel for the Competitive Enterprise Institute, a libertarian think tank funding the lawsuit. “Congress limited subsidies to ‘exchanges established by the state,’ but the government claims this means exchanges established by anyone.”
The government begs to differ, arguing in prior court briefs that the phrase was just semantics. Congress always intended the subsidies to be available for states with federal exchanges, according to the government.
While the brief lays out the institute’s main arguments, it doesn’t address recent news reports that question whether the case’s four plaintiffs were actually hurt by the healthcare law. The Wall Street Journal reported that none of the plaintiffs appeared to be affected by the law’s individual mandate to get health insurance or face a penalty, casting doubt on whether the lawsuit can move forward.
The institute has responded that lower courts have ruled on the issue and found no problems.
A decision on King v. Burwell is expected this summer.
