In a decision that keeps the Affordable Care Act intact, the U.S. Supreme Court has upheld the use of federal subsidies under the health law in states that have not created state-run marketplaces.

In a 6-3 vote in favor of the Obama administration, justices ruled that residents in states that rely on the federal marketplace are eligible for tax credits to purchase insurance based on the high court’s interpretation of ACA language.

In their opinion, justices said the tax credits are one of the act’s key reforms and whether they are available on federal exchanges is a question of deep “economic and political significance.”

“When read in context, the phrase “an exchange established by the state under [in the ACA] is properly viewed as ambiguous,” the majority justices said. “The phrase may be limited in its reach to state exchanges. But it could also refer to all exchanges – both State and Federal – for purposes of the tax credits.”

The closely watched case was heard before the Supreme Court on March 4 and analysts had issued mixed predictions about how justices would find. However, the high court majority agreed with the federal government’s argument that the ACA allows subsidies whenever patients buy insurance on any exchange. Challengers had argued the law only allowed for subsidies for purchases through state exchanges.

Dozens of friend of the court briefs were sent to the high court in support or opposition of King, including comments from the American College of Physicians, the American Thoracic Society, and the American Hospital Association. The ACP and its allies had urged the court to uphold the premium subsidies created by the ACA in all states.

The opinion means millions of patients will keep their subsidies under the ACA. The case had caused a whirlwind of predictions about the number of Americans who would lose subsidies had the Supreme Court ruled for King. An Urban Institute analysis released June 15 estimated a King ruling would have resulted in 8.2 million fewer Americans having health insurance in 2016. Another report from Rand Corp. found that individual-market enrollment would have declined by an estimated 10 million people (70%). Avalere Health found that average annual premiums would have risen by $3,300 in 2015 should King be successful. Analysts also predicted that a King verdict would lead to an unprecedented amount of uncompensated care. However, challengers have said that a ruling for the government will have negative effects on job growth and the economy.

agallegos@frontlinemedcom.com

On Twitter @legal_med

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