AP Explains: Supreme Court Case Against Obama's Health Law

AP Explains: Supreme Court Case Against Obama's Health Law

The government subsidies are what make health care plans affordable.

Published March 4, 2015

The U.S. Supreme Court this week hears a challenge to President Barack Obama's health care overhaul. If successful, the lawsuit would cripple Obama's prized domestic achievement, a program that has brought the U.S. as close as it has ever come to universal health care. The Affordable Care Act passed Congress in 2010 without a single Republican vote in favor. An explanation of the legal case:

FOUR WORDS DETERMINE THE LAW'S FUTURE

The lawsuit focuses on the health insurance marketplaces, or exchanges, that allow people to find coverage if they don't get insurance through their jobs or the government. The federal government, through the HealthCare.gov website, runs the exchanges in 37 states - largely those led by Republicans who declined to set up state-based systems. The distinction between state-run and federally run exchanges is crucial to the Supreme Court case because of four words in the nearly 1,000-page law. The challengers say the law allows subsidies - in the form of tax credits - only for people who get their insurance through an exchange "established by the state." The plaintiffs interpret the phrase to mean that Congress intended to make the subsidies available only on the condition that states set up their own marketplaces. The Obama administration says that interpretation is far too narrow: If Congress was trying to make health care affordable to all Americans, why would lawmakers have worded it in such a way that omits help for so much of the country?

| READ ALL ABOUT THE HEALTH INSURANCE MARKETPLACE |

HOW IMPORTANT ARE THE SUBSIDIES TO THE HEALTH PROGRAM?

Extremely. The goal of Obama's health care program was to provide universal insurance coverage at a time when an estimated 50 million Americans lacked it. That number has declined to an estimated 36 million. The initiative also aimed to drive down soaring health care costs. Critical to that goal is keeping plenty of healthy people in the pool of insured. And a key component is providing financial help for those who otherwise couldn't afford it. Independent studies by the Urban Institute and the Rand Corporation estimate that 8 million people would lose insurance if the court rules for the plaintiffs.

A RISK FOR BOTH SIDES

If the U.S. government loses the case, a key pillar of Obama's health care program would crumble. But a win for the plaintiffs also carries risks for Republicans because the majority of consumers who would lose their subsidies live in states with Republican governors who refused to set up state-run exchanges. Nearly two dozen Republican senators facing re-election next year are also from those states. Already, some Republicans are throwing around ideas to help subsidy recipients temporarily until the law can be rewritten. But that would only open the door to another long and bitter partisan fight over government-backed health care.

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(Photo: Gary Cameron/Reuters/Landov)

Written by Alexandra Olsen, The Associated Press

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