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Obamacare ruling met with joy and disappointment

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Obamacare advocates and many health-care providers breathed a big sigh of relief Thursday as what was called an "existential" threat to the Affordable Care Act was batted aside by the Supreme Court, which voted to uphold subsidies for millions of people served by the federal insurance marketplace.

But opponents of the ACA were angry and disappointed over the resolution of what was possibly their last and best chance to cripple the landmark health-care law. Those opponents had challenged the legality of the Internal Revenue Service's opinion that tax credits are allowed to be granted to customers of in 34 states under the ACA.

"We are deeply disappointed with today's Supreme Court decision because it hurts Americans like us in two ways," said the four Virginia residents who were plaintiffs in the Supreme Court case, David King, Brenda Levy, Rose Luck and Douglas Hurst.

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"First, it threatens something that our democracy is based on: the rule of law. And second, it allows the IRS to keep offering nationwide subsidies even though the law passed by Congress says otherwise. That unfairly restricts the health insurance choices of millions of people, and threatens their jobs, as well."

But Health and Human Services Secretary Sylvia Burwell, in her own reaction to the decision, also invoked "millions" of Americans when she said they are benefiting from the subsidies, which make their health plans affordable.

"Americans in all 50 states and the District of Columbia can continue to rely on the security and peace of mind that come with affordable, quality, health-care coverage," said Burwell, who was the named defendant in the suit challenging the subsidies.

Anne Filipic, president of the Obamacare advocacy group Enroll America, said, "Although we've always felt confident about the outcome of this case, it's a relief to finally be able to move past these divisive arguments so we can focus on getting more Americans covered in the next enrollment period, and supporting the newly insured as they use and renew their coverage."

If the plaintiffs had won at the Supreme Court, about 6.4 million people in 34 states who receive subsidies to offset the cost of the plans they buy through would have lost that assistance. Many of those people, who have low and moderate incomes, were expected to drop their health coverage because it would no longer be affordable to them.

The plaintiffs' arguments hinged on the claim that the ACA only allows an exchange established "by a state" to sell subsidized coverage. But the Supreme Court rejected that narrow reading of the law, despite the fact that the ACA does not explicitly say that subsidies can be issued to customers of a federal marketplace.

"The court's opinion is very strong for the government," said Nicholas Bagley, a University of Michigan assistant law professor and Obamacare proponent. "The court refused to believe that Congress would use a phrase tucked away in the tax code to deprive subsidies to people in states that refused to set up exchanges."

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But Sam Kazman, general counsel for the Competitive Enterprise Institute, which had bankrolled King v. Burwell and three other similar challenges, called the ruling "a tragedy for the rule of law in our country."

"The court has allowed the IRS to rewrite a law enacted by Congress in a ruling that undercuts the Constitution's separation of powers," he said.

Supporters of the Affordable Care Act celebrate as the opinion for health care is reported outside of the Supreme Court in Washington, D.C., on June 25, 2015.
Al Drago | CQ Roll Call | Getty Images

Hospital and insurance stocks rose on news of the decision, a reflection of the fact that both industries have benefited from an influx of newly insured, often-subsidized customers. Companies in both sectors had been closely watching the case because of worries they would take a financial hit if the subsidies went away.

"We are very pleased with the court's ruling," said Hospital Corp. of America spokesman Ed Fishbough, whose company is the largest for-profit hospital operator. "As we have said before, we support efforts that improve access to providing affordable coverage for the uninsured."

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Ascension spokesman Nick Ragone, whose company has the largest non-profit hospital system, said, "We are delighted that the Supreme Court has affirmed the Affordable Care Act and with it our ability to deliver personalized and compassionate care to those that need it. This will strengthen the health and well-being of the individuals and communities we are privileged to serve."

Dan Durham, interim CEO of America's Health Insurance Plans, the industry trade group, said, "With the certainty provided by the Supreme Court's decision, now is the time to focus on what matters most to consumers: ensuring access to affordable coverage and high-quality health care. Health plans will continue to lead in advancing this goal."

The decision also was lauded by a slew of health advocacy and doctors' groups, including the American Medical Association, the American Cancer Society, the American Diabetes Association, the American Heart Association and the National Multiple Sclerosis Society.

"Congress responded to gaping holes in the health insurance system that left millions of people—particularly those affected by serious chronic conditions like diabetes—unable to afford health coverage," said Kevin Hagan, CEO of the American Diabetes Association. "We cannot significantly improve access to quality, affordable health coverage unless federal financial assistance is available in federal and state marketplaces nationwide."

Even as they were disappointed in the Supreme Court decision, Obamacare opponents used it as an opportunity to restate their objections to the law, and yet again predict dire outcomes for the nation as a result of it.

"The Supreme Court's decision ends the detour into the legality of drafting and returns the focus to the core problem with Obamacare: It is poor health insurance policy, poor health-care policy, poor budget policy and poor economic policy," said Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office.

"Today's ruling ensures that growth will continue to be impaired, taxes will continue to rise, dangerous entitlement spending will feed the unsustainable federal budget and families will be burdened with expensive health insurance that provides inadequate access to actual care."

Nina Owcharenko, director of health policy studies for The Heritage Foundation, a conservative group, said, "Despite the decision, the problems of Obamacare are real and not getting better. The law's flawed foundation continues to make Obamacare unworkable, unaffordable and unpopular."

Owcharenko cited proposed double-digit percentage rate increases for many Obamacare insurance plans next year.

"The Supreme Court ruling does not fix Obamacare," she said. "The only fix to Obamacare is its repeal."

But Mary Kay Henry, international president of the Service Employees International Union, noted that, "In the last five years, extremist Republicans have tried and failed through two Supreme Court cases and 56 votes to repeal the Affordable Care Act and have no plan for replacement."

"Not one man or woman, grandparent or child, has gained health-care coverage from these efforts," Henry said. "It's the very law that extremists are trying to do away with—Obamacare—that has increased access to care for millions."