Move Surprises Those Following the Case

The US Supreme Court has elected to take up the issue of tax credits given to users of the federal health exchange, setting the stage to resolve one of the most highly contested interpretations of the health care act. The court placed the case of King v. Burwell, U.S. Supreme Court, No. 14-114, on the list on November 7 rather than waiting as expected until the following Monday – a move that surprised those following the case.

A ruling by the Supreme Court is important in that it will either stop subsidies for health care among more than five million consumers, or will firm up the legal foundation of the law against the most significant legal challenge it has yet faced.

The petition before the court was brought by opponents of the Patient Protection and Affordable Care Act (“ACA”), and hinges on eight words in the original language of the act -- “enrolled through an Exchange established by the State.” That language was intended to give states an incentive to create their own health care marketplaces, called exchanges.

Sixteen states have implemented a state run health insurance exchange, while others make use of the federal government-run health insurance exchange. Still other states have elected to partner with another state or the federal government. Five million-plus consumers in 34 states without their own exchanges are at issue.

Under the ACA, the Internal Revenue Service authorized subsidies in the form of tax credits, which were intended in the act to make the health care programs more accessible to lower-income consumers. In July, the 4th US Circuit Court of Appeals upheld the credits.

The Supreme Court is expected to hear arguments in the case in March, with a ruling announced not later than June of 2015. There is no analysis yet on the impact this may have on the coming tax preparation season.

The Court’s order reads:

14-114       KING, DAVID, ET AL. V. BURWELL, SEC. OF H&HS, ET AL.

                   The petition for a writ of certiorari is granted.

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Sources: Supreme Court of the United States List of Ceriorti Granted