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Supreme Court Upholds Obamacare Subsidies

WASHINGTON (CBSNewYork/AP) -- The Supreme Court on Thursday upheld the nationwide tax subsidies under President Barack Obama's health care overhaul, in a ruling that preserves health insurance for millions of Americans.

The justices said in a 6-3 ruling that the subsidies that 8.7 million people currently receive to make insurance affordable do not depend on where they live, under the 2010 health care law.

The outcome is the second major victory for Obama in politically charged Supreme Court tests of his most significant domestic achievement.

"As the dust has settled, there can be no doubt that this law is working," Obama said after the ruling. "It has changed and in some cases saved American lives. It set this country on a smarter, stronger course. Today, after more than 50 votes in Congress to repeal or weaken this law, after a presidential election based in part on preserving or repealing this law, after multiple challenges to this law before the Supreme Court, the Affordable Care Act is here to stay."

President Obama / Obamacare Ruling
President Barack Obama, flanked by Vice President Joe Biden, gives a statement on the Supreme Court health care decision in the Rose Garden at the White House on June 25, 2015. (Credit: Alex Wong/Getty Images)

Chief Justice John Roberts again voted with his liberal colleagues in support of the law. Roberts also was the key vote to uphold the law in 2012. Justice Anthony Kennedy, a dissenter in 2012, was part of the majority on Thursday.

"Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them," Roberts wrote in the majority opinion.

Nationally, 10.2 million people have signed up for health insurance under the Obama health overhaul. That includes the 8.7 million people who are receiving an average subsidy of $272 a month to help pay their insurance premiums.

Of those receiving subsidies, 6.4 million people were at risk of losing that aid because they live in states that did not set up their own health insurance exchanges, like New Jersey. New York and Connecticut are among the states that created their own health insurance marketplaces.

The challenge devised by die-hard opponents of the law, often derided by critics as "Obamacare," relied on four words -- established by the state -- in the more than 900-page law.

The law's opponents argued that the vast majority of people who now get help paying for their insurance premiums are ineligible for their federal tax credits. That is because roughly three dozen states opted against creating their own health insurance marketplaces, or exchanges, and instead rely on the federal to help people find coverage if they don't get insurance through their jobs or the government.

Obamacare Upheld
Supporters of the Afforable Care Act rally outside the U.S. Supreme Court on June 25, 2015. (Credit: Brendan Smialowski/AFP/Getty Images)

In the challengers' view, the phrase "established by the state" demonstrated that subsidies were to be only available to people in states that set up their own exchanges. Those words cannot refer to exchanges established by the Health and Human Services Department, which oversees, the opponents argued.

The administration, congressional Democrats and 22 states responded that it would make no sense to construct the law the way its opponents suggested. The idea behind the law's structure was to decrease the number of uninsured. The law prevents insurers from denying coverage because of "pre-existing" health conditions. It requires almost everyone to be insured and provides financial help to consumers who otherwise would spend too much of their paycheck on their premiums.

The point of the last piece, the subsidies, is to keep enough people in the pool of insured to avoid triggering a so-called death spiral of declining enrollment, a growing proportion of less healthy people and premium increases by insurers.

"Today is a victory for hardworking Americans all across this country whose lives will continue to become more secure in a changing economy because of this law," Obama said.

Several portions of the law indicate that consumers can claim tax credits no matter where they live. No member of Congress said that subsidies would be limited, and several states said in a separate brief to the court that they had no inkling they had to set up their own exchange for their residents to get tax credits.

The 2012 case took place in the midst of Obama's re-election campaign, when he touted the largest expansion of the social safety net since the advent of Medicare nearly a half-century earlier. But at the time, the benefits of the Affordable Care Act were mostly in the future. Many of its provisions had yet to take effect.

In 2015, the landscape has changed, although the partisan and ideological divisions remain for a law that passed Congress in 2010 with no Republican votes.

Obama touted the law Thursday, saying more than 16 million previously uninsured Americans have gained coverage and that it has helped keep the cost of health care down even for those who are insured through their employers.

"This is not an abstract thing anymore," Obama said. "This is not a set of political talking points. This is reality. We can see how it is working. This law is working exactly as it's supposed to. In many way, this law is working better than we expected it to."

Rodney Hammond, of Carteret New Jersey told CBS2's Hazel Sanchez he can keep his health insurance thanks to the Supreme Court ruling.

"There was no way I was expecting this to happen because they've appealed it a couple of times," he said. "And I know everybody that have it is afraid of something happening to it later. So this is a big victory for every American who has the subsidies."

Republican leaders, however, said the debate is far from over. House Speaker John Boehner said GOP members will continue their fight to repeal and replace the law.

"It's just fundamentally broken, and we're going to continue our efforts to do everything we can to put the American people back in charge of their health care, not the federal government," Speaker Boehner said.


In New Jersey, where more than 170,000 residents receive subsidies, Gov. Chris Christie said on Twitter that Thursday's decision means leaders must turn their attention to making the case that Obama's signature health care law must be replaced.

Democratic U.S. Sens. Bob Menendez and Cory Booker praised the court's decision.

New Jersey Policy Perspective estimates that insurance costs to 308,000 residents in the individual market would have climbed by almost 50 percent if the tax credits were eliminated. The average premium would have risen to almost $9,000 from roughly $6,000.

(TM and © Copyright 2015 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2015 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)


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