Supreme Court upholds Obamacare subsidies Liz Goodwin and Meredith Shiner June 25, 2015

The U.S. Supreme Court in Washington. (Photo: Gary Cameron/Reuters)

The Supreme Court spared a key part of President Barack Obama’s signature law in a 6-3 decision Thursday, ruling that the federal government may continue to subsidize health insurance in the dozens of states that did not set up their own exchanges.

Justice Anthony Kennedy, who expressed deep reservations when the case was argued about whether striking down the subsidies would coerce states into establishing their own exchanges, joined the court’s four liberals and Chief Justice John Roberts to uphold the subsidies. Roberts, who was the object of immense conservative blowback after he joined the court’s liberals three years ago to uphold the law’s individual mandate, again wrote the majority opinion in support of the Obama administration position.

The law’s challengers argued that four words in the statute — “established by the state” — meant that only people who bought insurance from exchanges in the handful of states that set up their own marketplaces would be eligible for tax credits and other government assistance. The government countered that the clear intent of the law was to provide the subsidies for all lower-income Americans who sought coverage.

More than 6 million people would have lost those subsidies if the court had ruled against the government, which experts said would lead to skyrocketing premiums and even a potential “death spiral” that could have dealt a mortal blow to Obamacare. The White House insisted in the days leading up to the decision that Obama felt he had nothing to fear because the government’s case was strong. But they are no doubt breathing a sigh of relief.

Around 17 million people have gained coverage from the law, according to a Rand Corp. study, and a recent poll shows that for the first time since it passed, more Americans approve of the law than disapprove.

The case had put Republicans in an awkward spot. Publicly, over the last few weeks, Republican lawmakers expressed their hope in news conferences and speeches that the Supreme Court would rule against the government. But privately, aides conceded that the politics of victory would be more complicated than defeat.

The Republican-led Congress would have been under pressure to come up with at least a temporary fix for the more than 6 million people who would most likely lose their insurance, contorting itself into the odd position of extending subsidies while still opposing the law. (At least one Senate Republican wrote a bill that would temporarily extend the subsidies while phasing out the individual mandate, which would eventually kill the law.) If the Republican majority had just let the subsidies lapse, they’d be faced with angry constituents who just lost coverage and a Democratic PR assault highlighting the most heart-wrenching cases of people who lost their insurance.

Now, things will most likely return to the status quo — in which Republicans threaten to dismantle the president’s signature legislative achievement but do not actually take concrete steps to take health care coverage away from people.