WASHINGTON — The US Supreme Court will hear a case Wednesday that could kill ObamaCare on a technicality.
The King v. Burwell legal challenge concerns the subsidies that dramatically reduce the cost of insurance premiums. The GOP-backed lawsuit argues the tax credits, as written, should go only to people enrolled on state exchanges and not those on the federal HealthCare.gov exchange.
If the justices agree, more than 9 million people in as many as 37 states would lose their subsidies, sending the marketplace into a so-called “death spiral.”
“ObamaCare exchanges only worked in conjunction with the subsidies,” said Louise Sheiner, a health economist at the Brookings Institution. “So if you are taking out one piece of the stool, the whole thing falls apart.”
Sheiner believes it’s “laughable” that Congress intended subsidies only for people on state exchanges.
Unlike the first Supreme Court challenge of the law, this case looks at whether the IRS overreached in extending subsidies to those on non-state exchanges.
If the lawsuit is successful, it could force Congress to find a remedy for those losing subsidies.
“It would give Congress a broader opening [to make changes],” said Thomas Miller, a fellow at the American Enterprise Institute.