Supreme Court upholds Obamacare subsidies in Indiana





WASHINGTON — The Supreme Court upheld a key part of the Affordable Care Act Thursday, ruling 6-3 that income-based insurance subsidies are valid in states like Indiana that deferred to the federal government to run their health exchanges.

The decision preserves help for the more than 180,000 Hoosiers who used HealthCare.gov to buy insurance this year. Nearly nine in 10 received a tax credit, which lowered premiums by an average $320 a month.

"I'm thrilled," said Janice Gigli, 62, of Gosport, who relies on a subsidy to reduce the cost of insurance for herself and her husband to $423 a month. Without the subsidy, Gigli said, she could not afford coverage and might not have been able to pay for a health problem she is getting checked now.

"I just wish that people would quit fighting (the law) so hard because it's not a bad thing to let everybody be healthy," she said.

Gov. Mike Pence called the decision "profoundly disappointing to me and every Hoosier who had hoped this ruling would give our nation the opportunity to start over on health care reform."

"Today's display of judicial activism by the Supreme Court upholds this deeply flawed law to the detriment of millions of Hoosiers who will continue to be subject to the mandates and taxes in Obamacare," Pence said.

The challenge to the subsidies, brought by four Virginia residents with backing from a libertarian think tank, is similar to one pending in Indiana.

That suit by Attorney General Greg Zoeller and 39 school districts, which Pence supports, had been on hold until the Supreme Court issued its opinion.

The high court's decision upends the main argument of Indiana's challenge. But it did not consider the suit's contention that the Affordable Care Act violates the 10th Amendment protection of state sovereignty. That issue still has to be decided in federal court.

Zoeller said he will ask the U.S. District Court to hear the rest of the challenge.

"The court's decision does not address the question that Indiana has raised, whether state government is to be treated as a taxable entity subject to the IRS regulations of the employer mandate," Zoeller said in a statement.

Rod Gardin, superintendent of the East Porter County School Corporation, which is among the Indiana schools challenging the law, said the decision offers no relief to schools like his that have reduced the hours of instructional aides, cafeteria workers and custodians to avoid having to offer them health insurance. That's because employers face penalties if a full-time worker isn't offered insurance and relies on a subsidy to purchase coverage through HealthCare.gov. If the subsidies had been invalidated in Indiana, the employer penalties could not be triggered.

"We will continue to move forward in partnership with Attorney General Zoeller to achieve an appropriate remedy," Gardin said.

But another Indiana employer, the state's hospitals, cheered the ruling.

"Indiana hospitals are breathing a collective sigh of relief," said Doug Leonard, president of the Indiana Hospital Association. "Hundreds of thousands of our patients with moderate to lower incomes will continue to have access to tax credits and subsidies that make health coverage affordable."

Hospitals accepted payment cuts in the ACA because they expected more customers would have health insurance. Trade groups told the high court that an elimination of subsidies would devastate some hospitals because more patients would be unable to pay their bills.

Caitlin Priest, director of public policy for Covering Kids and Families of Indiana, a group that works to make sure all those eligible for public programs are enrolled, said the staff that helps Hoosiers enroll has seen how important the ACA is to their families.

"Today's ruling means that we can continue our work toward achieving a culture of coverage in Indiana," Priest said.

The health exchanges are one of the main ways that the ACA aimed to expand coverage to millions more Americans. Coverage is available to those who aren't offered insurance through their employer or through a government program like Medicare or Medicaid.

Without the subsidies, which are available to those earning up to four times the federal poverty level, Hoosiers would pay an estimated $3,800 a year more in premiums, according to health care consultant Avalere Health.

The legal dispute about the subsidies centered on a few words of a law that's about 1,000 pages long.

The part of the law that establishes the formula for calculating the tax credits refers to insurance purchased "through an exchange established by the state." The law also says the federal government's exchange will be available in states that choose not to run their own.

Challengers said a plain reading of the law means Congress meant to restrict subsidies to state-run exchanges.

But Chief Justice John Roberts, writing for the majority, called that interpretation "implausible." Roberts said the law's ban on insurers denying coverage to those with pre-existing conditions only works in conjunction with the requirement that most individuals be required to buy insurance and with the subsidies that help low- and middle-income people afford it.

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

In his dissent, Justice Antonin Scalia accused his colleagues of turning "somersaults" to reinterpret the health law to make it function. The result, he wrote, reveals "the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites."

"We should start calling this law SCOTUScare," he wrote.

Republicans said the decision shows the fight against the law moves to the 2016 presidential election.

"It is now clear that it will take a new occupant of the White House to repeal and replace Obamacare," said Indiana Sen. Dan Coats, a Republican.

Indiana Democratic Party Chairman John Zody said opponents should stop trying to deny coverage to those who need it.

"This includes Gov. Pence "" for he has wasted taxpayer money for over five years as a congressman and now as Indiana's governor fighting a law that's proven to be constitutional in the United States," Zody said. "Any other course of action now is simply unacceptable to Hoosiers."

USA TODAY reporter Richard Wolf contributed to this report.

Contact Maureen Groppe at mgroppe@gannett.com or @mgroppe on Twitter.