As every healthcare geek and Supreme Court wonk will tell you, on March 4, the U.S. Supreme Court will hear oral argument in King v. Burwell (an amalgamation of four cases – King v. Burwell, Halbig v. Burwell, Pruitt v. Burwell, and Indiana v. IRS). As the latest attack on the Affordable Care Act a/k/a “Obamacare,” King v. Burwell challenges the IRS’s interpretation of an Affordable Care Act provision that authorizes tax credits/subsidies for qualifying individuals and families who purchase health insurance through an exchange “established by the state.” These credits/subsidies are considered to be a crucial element of Obamacare because they make participation possible for qualifying individuals and families who cannot afford the monthly insurance premiums applicable to policies purchased on the exchange. In fact, studies show that the credits/subsidies can reduce the cost of monthly premiums for qualifying individuals and families by as much as 89%.
Because 36 states elected not to establish their own insurance exchanges, the federal government created exchanges to allow the citizens of those states the same access to health insurance afforded to citizens residing in states with state-run exchanges. In turn, the IRS issued regulations that extend the tax credits to those who purchase insurance through the federal exchanges . On March 4, the attorneys for the Petitioners will argue that these IRS regulations go beyond the authority granted to the IRS by Congress. In other words, the IRS is not authorized to allow tax credits in support of the purchase of health insurance policies on federal insurance exchanges. Naturally, if this argument prevails, low-income individuals and families residing in any one of the 36 states will find it difficult, if not impossible, to retain and/or obtain health insurance as promised under the Affordable Care Act.
Sheppard Mullin’s Healthcare Group will be closely watching and listening to the oral arguments in King v. Burwell. Once the oral arguments have concluded, the Sheppard Mullin Healthcare Group will be hard at work critiquing the lawyers’ performances and presentations, analyzing the effectiveness of the presentations in an attempt to forecast the decision-to-come, and considering the possible fall-out no matter what the future decision may be.
Keep a close eye on this blog for future analysis of the oral arguments, the eventual decision, and the potential and actual impact of King v. Burwell.