King v. Burwell Case

By: Jason Tran

The ambiguity of the phrase: “established by the state”, in the Affordable Care Act, threatens health insurance subsidies for the recipients of President Obama’s health care. Up to now, those who seek health insurance through the federal or state exchange receive federal credit. When the initial version of the bill in 2009 was drafted, it assumed states would create their own health care exchanges. Senators then allowed the federal government to set up an exchange to allow anyone in a state that does not have their own exchange to shop through the government. The interpretation of the vague phrase, “established by the state”, conflates who is legally allowed to receive federal credit. People who buy health care through an exchange set up by their state are eligible to receive federal grant, but the confusion revolves around whether those who receive health care through federal exchange can also be subsidized by the government.

David M. King, main plaintiff challenging the requirements to receive health insurance subsidies, brings this issue to court. Mr. King argues that the government should not be granting subsidies to people who bought health care plans through federal exchanges instead of through state exchanges under the current health care law—thus making the distribution of subsidies illegal. King v. Burwell (Sylvia Mathews Burwell is the United States Secretary of Health and Human Services) case climbed to the Supreme Court after lower courts ruled against them.

Currently 34 states opted out of setting their own health care markektplace and use the federal health care exchange instead. Around 6.4 million citizens are in risk of losing their federal subsidies. Millions of Americans rely on federal subsidies to afford their health care, but the ambiguous meaning behind “established by the state”, might force them to fill the financial aid void with money out of pocket or continue their lives without health care—based on what state they live in.

States are taking initiative in precaution of the Supreme Court’s ruling. Arkansas, Delaware and Pennsylvania, have already submitted their plans of creating their own exchanges in the following year, thus making their residents eligible for federal subsidies in the future—if the court rules in favor of Mr. King. Many other states are beginning to consider setting up a state exchange to ensure their constituents receive federal grants.