Supreme Court Will Hear Case Challenging Obamacare Subsidies

The Supreme Court will again take up a central question about President Obama's signature law — the Affordable Care Act.

On Friday, the court decided to hear a case challenging the legality of some of the subsidies provided by the federal government.

At issue is the language Congress used when it passed the health care law. The Supreme Court will decide whether Congress intended to provide subsidies both for Americans who bought insurance through exchanges set up by states and for those who bought through exchanges set up by the federal government on behalf of states.

Update at 2:55 p.m. ET: Millions Of Subsidies Could Be Cut

Noting that the federal government runs health insurance exchanges in some 36 states, Julie Rovner of Kaiser News tells NPR that a ruling in favor of the challengers could have wide repercussions.

"You'd have millions of people who suddenly wouldn't be able to afford insurance anymore," Rovner says, "and the whole insurance market could theoretically collapse."

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The Supreme Court is trying to settle disagreement between lower courts, which have issued conflicting rulings on the question.

If you remember, in July, two courts — the United States Court of Appeals for the District of Columbia Circuit and the 4th Circuit court — issued conflicting rulings within hours of each other.

The details are complicated, but the bottom line is that a decision in this case could have significant repercussions for Obamacare.

According to California Healthline, an industry digest, nearly 5 million — or most — Americans who signed up for Obamacare through federal exchanges receive a federal subsidy by way of refundable tax credits.

This will be the second major case the court takes up on the law. In the summer of 2012, the court ruled the law's so-called individual mandate was essentially a tax, so the federal government had a right to mandate coverage for everyone.

The decision was a huge victory for the Obama administration.