Divided United States Supreme Court Upholds Tax Credits Under Affordable Care Act


Divided United States Supreme Court Upholds Tax Credits Under Affordable Care Act

PIERRE, S.D. – Attorney General Marty Jackley announced today that the United States Supreme Court issued a divided decision in King et al. v. Burwell, et.al., upholding section 36B of the Internal Revenue Code, which allows tax credits for insurance purchased on any exchange under the Act.

“From day one South Dakota challenged the federal takeover of healthcare as infringing upon our individual and state rights. While today’s opinion allows this federal takeover to continue, it highlights the obvious concern with both the U.S. Department of Health and the IRS’ implementation of federal healthcare,” said Jackley.

The Court held the Internal Revenue Service (IRS) permissibly promulgated regulations to extend tax-credit subsidies to coverage purchased through federal exchanges. The Court found the credits are “necessary for the Federal Exchange to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”

A strongly worded dissent criticized the majority opinion, noting that a strict interpretation of the Act would prevent the Act from working as well as hoped, so the Court “rewrites the law to make tax credits available everywhere”. The Oklahoma District Court held that the ACA does not allow subsidies for insurance purchased on federal exchanges. There are 34 states, including South Dakota, who declined to establish Exchanges and two states who failed to timely establish Exchanges for 2014.

Section 36B of the Internal Revenue Code, which was enacted as part of the Patient Protection and ACA, authorizes federal tax credit subsidies for health insurance coverage that is purchased through an “Exchange established by the State under section 1311” of the ACA. IRS promulgated regulations to extend tax-credit subsidies to coverage purchased through Exchanges established by the federal government under Section 1321 of the ACA.

The last estimate to run a state based exchange was done back in 2011 through the Health Insurance Exchange Task Force. Navigant estimated it would cost South Dakota taxpayers $45,233,699 to implement a hosted exchange and an additional 6 to 8 million in state revenues to sustain the State run Exchange.


4 thoughts on “Divided United States Supreme Court Upholds Tax Credits Under Affordable Care Act”

  1. In a 6-3 decision, the Supreme Court has ruled that statutes have no meaning other than what someone wants them to mean. The Court has ruled that in spite of the plain plans of the people implementing the statute, they were only kidding when they told us what those lines meant. I am beginning to believe we are no longer a nation of laws.

  2. We are no longer a nation of laws and haven’t been for awhile now. Obama has decided which laws he wants to obey and when, and no one has stopped him. He has enacted laws he wants by virtue of “executive order” or EPA etc new “regulations” if he can’t get Congress to enact them. But now he has the support of the Supreme Court, which is truly scary. Now passing the trade bill has given Obama even more authority to do what he wants, damn the consequences to the people of America, and Congress can only vote up or down on anything he does on this; the funny thing is that the GOP supported him, including our three esteemed legislators, and the Dems were against it.

    1. The Republicans in Congress, through incredibly poor management of legislation, picking losing fights over and over again, doing everything they could to get in Obama’s way (even with ideas that were their own, only a few years earlier), and basic sophomoric behavior brought this entire problem down on us.

      They have no one to blame but themselves. But as long as they can continue to fool some of the people some of the time, they won’t break the cycle. Repeal and Replace. Yeah. That’ll never happen, but some people actually believe that is a legitimate stance.

  3. The plain text of the law, as well as the well documented comments by those involved in crafting it (prior to the lawsuit) established the intent of the law was to punish States that did not create an Exchange.

    The Court’s opinion was clearly focused on what Robert’s view of Congress’s intent, and what he feared would be the result of ruling on the law itself. In other words, what he WANTED them to mean and what the Court had the power to say they meant.

    “When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’

    ’The question is,’ said Alice, ‘whether you can make words mean so many different things.’

    ’The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.”

    There’s little enough public respect for the Executive and Legislative branches and if the public loses its faith in the rule of law, viewing it as nothing more than another political branch, we are truly, and deeply, in crisis.

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