According to the U.S. Census Bureau, the current population of America is just over 325 million. It should come as no surprise, then, that federal reform of any kind is contentious, considering the number of people affected.
This was certainly the case when the Obama administration sought to pass healthcare reform. The Patient Protection and Affordable Care Act (ACA) is also known as Obamacare. It was enacted in 2010, but not without serious opposition. This, in turn, led to a movement to repeal the law. There were 50 attempts at repeal in the House and Senate, along with several lawsuits, some of which made it to the level of the Supreme Court.
Two major cases considered by the Supreme Court could have resulted in a negative impact on Obamacare. Yet, in each case, the law was upheld by Supreme Court ruling. The two cases were National Federation of Independent Business v. Sebelius and King v. Burwell.
Here is what you should know about these Supreme Court rulings.
National Federation of Independent Business v. Sebelius (2012)
The passage of the ACA heralded some big changes to the system of health insurance in the United States. While the law provided affordable coverage for more Americans, it also included the individual mandate. This requires every U.S. citizen, with few exceptions, to maintain minimum essential health coverage, as defined by the law.
Those who fail to comply with the law are subject to increasing annual penalties. In a lawsuit filed by the National Federation of Independent Business, along with 26 states and several individuals, questioned constitutionality of the individual mandate, as well as the Medicaid expansion provisions included in the ACA.
The Supreme Court ruled that expansion of Medicaid is within the power of Congress to enact. However, it allowed that states could opt out of expansion. Unfortunately, this only served to harm Americans with the lowest income, those most in need of the healthcare assistance provided by Medicaid. The ruling also concluded that the individual mandate lies within the constitutional authority of Congress if it’s considered as a tax on those who do not have health insurance.
King v Burwell (2015)
In order to ensure that every American has access to affordable care options, the ACA created state-run health insurance exchanges. There is an allowance for states to opt out of creating their own exchanges, even though there are federal funds provided to help them. The alternative was that the federal government establish exchanges for these states.
It grants exemption from the individual mandate under ACA rules for the lowest-income individuals and families. The law also provided for tax credits to help low-income individuals and families seeking coverage through state exchanges as a way to limit exemptions. The precise language of the law did not apply to exchanges created by the federal government. The IRS interpreted it to include all health insurance exchanges, regardless of who created them.
A number of Virginia residents that would have been exempt from the individual mandate. If not for this exception by the IRS (because Virginia declined to create their own state-run exchange) sued.
They claimed that the IRS had exceeded its authority. The Supreme Court ruled that intention of the law was clearly to allow tax credits for all exchanges. Even though the language only included state-created exchanges, the ACA was upheld.