The Supreme Court didn’t just uphold Obamacare subsidies for a majority of states on Thursday. It also made it harder for a future Republican president to make changes to them.
The court ruled 6-3 that the federal government can administer subsidies to all states, not just those that set up their own exchanges.
Plaintiffs in King v. Burwell charged that the IRS inappropriately misinterpreted the Obamacare statute on whether it could hand out the subsidies.
The court usually applies a two-step framework introduced in a case called Chevron U.S.A. v. Natural Resources Defense Council to decide whether an agency’s interpretation of a statute is correct. First, it asks whether the language is clear or ambiguous, and then it asks whether the court should defer to the agency.
The court ruled that the language was ambiguous, but decided that Chevron didn’t apply in King v. Burwell, mainly because the tax credits are a huge part of Obamacare and it seemed unlikely that Congress would have an agency answer the question of whether the subsidies should have gone to all states.
By not applying Chevron, the court decided to rule on the subsidies instead of deferring to the agency’s interpretation, said Mary Beth Musumeci, associate director for the Kaiser Commission on Medicaid and the Uninsured, during a Thursday call with reporters.
If the court had deferred to the agency, then it could have opened the door to another administration changing the agency’s interpretation of the subsidies.
Since the court ruled that its interpretation of the statute is for subsidies to go to all states, it will be much harder for a future Republican president to change that.
There could be changes to the statute if Congress passes them, such as the potential repeal of the “Cadillac” tax, said Larry Levitt, senior vice president of the left-leaning Kaiser Family Foundation.
