Thousands In Indiana To Keep Health Insurance Subsidies Under Supreme Court Ruling

INDIANAPOLIS – Thousands of Hoosiers will keep their Obamacare health insurance subsidies under a ruling Thursday from the U.S. Supreme Court.

The high court upheld a decision by the Internal Revenue Service to provide tax breaks to citizens who buy insurance through local health exchanges – even if those marketplaces are operated by the federal government.

The original law said those subsidies are to be available to people who purchase insurance through state-based exchanges. The court said that can be interpreted to mean state or federal exchanges.

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts wrote in the majority opinion. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”

The decision is a blow to Obamacare opponents who had hoped the court would rule against the subsidies, which could undermine the law and lead to big changes.

“It is now clear that it will take a new occupant of the White House to repeal and replace Obamacare,” U.S. Sen. Dan Coats, R-Indiana, said in a statement Thursday. “I will continue the fight to work on real health care solutions that lower costs, increase coverage and put patients in charge of their own health care decisions.”

The case comes out Virginia, where four people sued saying they should not have to buy health insurance and should not qualify for a tax credit – because they are in a state that did not create its own exchange.

Indiana Attorney General Greg Zoeller filed a similar suit in an effort to protect Hoosier companies from paying penalties for failing to provide minimum health coverage to employees. Those penalties kick in if at least one of the company’s employees signs up through an exchange and receives the federal subsidy.

Zoeller argued that no Indiana company should be subject to the penalty because Indiana has a federal exchange, not a state exchange.

But the Supreme Court’s ruling Thursday invalidates the argument.

Indiana Democratic Chairman John Zody said he hopes the decision means that Republican Gov. Mike Pence and others will cease their fight to eliminate the health care law.

“Today, many Hoosiers can breathe easier knowing they will not lose the health care coverage they depend on each day,” Zody said. “The Supreme Court’s opinion on King v. Burwell reaffirms what we already know – commonsense ideas that improve the lives of everyday folks, including Hoosiers, will always win.”

In a dissent, Justice Antonin Scalia – and joined by Justices Clarence and Samuel Alito – said that it is “quite absurd” a majority of the court determined that when the Affordable Care Act says “exchange established by the state” it means “exchange established by the state or the federal government.”