King v. Burwell arguments begin Wednesday

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The U.S. Supreme Court will begin hearing oral arguments in the King v. Burwell case on Wednesday, March 4. The case represents the most serious legal challenge to the Affordable Care Act (ACA) since the Court largely upheld the law in 2012. If the Court sides against the government, it has been estimated that more than 8 million people in 34 states (including Wisconsin) could lose their premium subsidies and go back to being uninsured.

In the case, four Virginia residents are arguing that the IRS misinterpreted the section of the ACA that describes who is eligible for individual premium subsidies. The text of the law says subsidies can be paid to people who enroll in a Qualified Health Plan through an Exchange “established by the state.” However, the IRS regulations authorized subsidies to be available nationwide, regardless of whether an individual enrolled through a state-based or federally-facilitated exchange.

The main issue in the case is one of statutory interpretation. A literal reading of the text may support the plaintiff’s argument, but the law’s supporters point out this interpretation seems to be at odds with the rest of the law. If the Court finds that the intent of Congress is not clear, it may defer to the IRS’ interpretation of the statute under the principle of “administrative deference” established in the famous 1984 case Chevron v. N.R.D.C..

King v. Burwell may also turn on the issue of the plaintiff’s standing, the legal principle that determines whether an individual may sue. The plaintiffs are claiming that they are injured by the IRS’ interpretation of the law because if they were not eligible for subsidies through Virginia’s federally-facilitated exchange, then the insurance would be so expensive for them that they would be exempt from the requirement to purchase it or pay a penalty. As the Wall Street Journal, Mother Jones, and others have reported, however, the plaintiffs may lack standing to bring the case due to their eligibility for other coverage, income level, age, or place of residence.

More about the case is available from the Wall Street Journal and Modern Healthcare.

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