The Supreme Court preserved a major piece of President Barack Obama’s legacy Thursday, ruling that Obamacare’s health insurance subsidies can continue to flow in all states — a decision that averts the unraveling of the five-year-old law.

The 6-3 decision in King v. Burwell maintains the structure of the Affordable Care Act and delivers a second major blow to Republican-backed attempts to undermine the president’s signature health legislation through the courts.


“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts wrote for the court.

Roberts was joined by the court’s four liberal justices: Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan — and frequent swing justice Anthony Kennedy, who voted in 2012 to strike the law’s individual mandate.

The high court ruled that the health care law as written does allow residents of states using the federal insurance exchange to receive premium subsidies for their coverage — an outcome that preserves subsidies for 6.4 million people. The court rejected the challengers’ claims that the law was designed to encourage states to operate an exchange by withholding subsidies but mandating insurers to operate under a new set of stringent rules, including the requirement to cover sick customers.

“It is implausible that Congress meant the Act to operate in this manner,” the majority of the justices wrote. “Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation. But those requirements only work when combined with the coverage requirement and the tax credits. So it stands to reason that Congress meant for those provisions to apply in every state as well.”

The majority justices wrote that the four-word phrase that the challengers said proved the law limited subsidies was “inartful.” The whole law, Roberts said, “contains more than a few examples of inartful drafting” — a phrase that prompted laughter in the courtroom.

A ruling against the Obama administration would have eliminated the subsidies in the 34 states that refused to set up an insurance exchange — including pivotal 2016 presidential battlegrounds such as Florida, Wisconsin and Ohio. The Urban Institute estimated that more than 8.2 million people would be uninsured as a result, which could have dramatically destabilized insurance markets.

The dissenting justices said that the law clearly says that the subsidies should be limited. Justice Antonin Scalia even suggested that the court “rewrote” the law and “we should start calling this law SCOTUScare,” which drew a smirk from Roberts.

“Words no longer have meaning if an Exchange that is not established by a State is ‘established by the State,’” Scalia wrote in a sharply worded dissent that was joined by Justices Clarence Thomas and Samuel Alito. Scalia read much of his dissent from the bench after Roberts read his majority opinion.

The decision is likely to stand as one of the most significant of the Roberts court because, unlike some other high-profile disputes on issues like campaign finance, its outcome will have a direct, practical impact on so many Americans — in addition to the political implications for the Obama administration.

President Barack Obama, who earlier this month said the court should never have agreed to hear the case, hailed the ruling, which will cement one of his signature achievements.

“After multiple challenges to this law before the Supreme Court, the Affordable Court Act is here to stay,” Obama said in a Rose Garden statement. “This was a good day for America.”

Administration officials contended they would have had no way to undo the damage if the court decided for the challengers and people lost their subsidies, which average $272 monthly — about three-fourths of the cost of premiums, according to administration figures.

Democratic presidential candidate Hillary Clinton praised the Supreme Court for upholding Obamacare subsidies nationwide and said it’s time for Republican attacks on the law to stop.

“Republicans should stop trying to tear down the law and start working across party lines to build on these successes,” she said in a statement.

That seems unlikely. Republican-led opposition to the law remains nearly as strong today as in 2010 when the law passed. Many Republican lawmakers on Thursday condemned the decision and said they would continue to pursue legislation to replace Obamacare. Senate Finance Committee Chairman Orrin Hatch, who’s authored his own Obamacare replacement plan, said GOP lawmakers won’t give up those efforts.

“This is just beginning,” Hatch told POLITICO. “There are all kinds of things that we’re considering.”

House leaders still haven’t agreed on the next steps. Their discussions over the last few months had focused on how to respond if the court struck down the subsidies, Speaker John Boehner said in a press conference.

“There’s been no decision made as how to pursue,” he said.

Republican presidential candidates were swift to denounce the ruling, pledging to scrap the law if elected. Former Florida Gov. Jeb Bush said he would “work with Congress to repeal and replace this flawed law with conservative reforms that empower consumers with more choices and control over their health care decisions.” Sen. Marco Rubio, whose home state of Florida has the most subsidized Obamacare customers, said he remains “committed to repealing this bad law” and replacing it with a plan he’s authored.

Republicans were publicly supportive of the King challengers, but some were privately nervous about how they would respond if the justices struck the subsidies. They said they wanted to have a legislative response ready for that scenario, but they had not agreed on a specific plan. Some in the party wanted to restore the subsidies, while others were insistent on opposing anything that would look like saving the president’s signature health care achievement.

“The Republicans have just been saved from themselves by the Supreme Court of the United States,” quipped House Minority Whip Steny Hoyer.

The ruling marks the second major win for the Affordable Care Act before the Supreme Court.

Supporters of the Affordable Care Act celebrate following the Supreme Court’s decision in King v. Burwell. | M. Scott Mahaskey

In 2012, the justices said in a 5-4 decision that the law’s individual mandate was constitutional. Last year in the Hobby Lobby case, the court said that Obamacare’s contraceptive coverage requirement violated a religious freedom law. That decision angered the law’s supporters, but it did not significantly alter its future in the same way the individual mandate or premium subsidies cases would have.

The challengers in King v. Burwell were four Virginia residents who didn’t want to comply with Obamacare’s individual mandate. They argued that one phrase in the law said subsidies should go only to people who get insurance through an “exchange established by the state.” They contended that the IRS illegally issued a regulation allowing residents of states relying on HealthCare.gov to receive financial assistance.

Solicitor General Don Verrilli argued for the administration that the disputed phrase was a term of art that encompassed both federal- and state-run exchanges. He also said that a broader reading of the law made clear subsidies should go to residents of all states.

The Roberts opinion didn’t address whether the IRS had the authority to issue a regulation allowing subsidies in the federal-run exchanges. Instead, the court said the intent of the ACA was clear enough — drawing scorn from the challengers.

“Today’s ruling is a tragedy for the rule of law in our country,” said Sam Kazman, general counsel for the Competitive Enterprise Institute, which funded the lawsuit. “The Court has allowed the IRS to rewrite a law enacted by Congress in a ruling that undercuts the Constitution’s separation of powers.”

Some of the attorneys involved in the case have predicted that the ACA will provide ample fodder for more litigation. Kazman said he doesn’t have another challenge in the works, but he “wouldn’t rule out” further legal action.

Though several lawsuits against the ACA are still pending, King is widely seen as the last major legal threat to the law. But the administration is still dealing with challenges as it continues to implement the program. It’s under pressure to keep down premium hikes and continue to boost signups in the exchanges, which will open for enrollment again in the fall.

Insurers on Thursday expressed relief that the subsidies will remain in place, avoiding what could have been a massive disruption to the individual insurance markets. Hospital and doctor groups around the country also applauded the court’s decision.

“There were more than 6 million good reasons for it because it ensures continued access to health insurance subsidies for so many Americans,” said Rich Umbdenstock, CEO of the American Hospital Association.

Outside the court Thursday, when it became clear that the justices sided with the administration, a roar went through a crowd of about 50 Obamacare supporters who had gathered. The crowd chanted “Ho ho, hey hey, the ACA is here to stay.”

Erin Mershon, Natalie Villacorta, Brett Norman and Seung Min Kim contributed to this report.