Supporters of the Affordable Care Act hold up signs as the opinion for health care is reported outside the Supreme Court in Washington Thursday. (Photo: Jacquelyn Martin/AP)

The Supreme Court spared a key part of President Barack Obama’s signature law in a 6-3 decision Thursday, ruling that the federal government may continue to subsidize health insurance in the dozens of states that did not set up their own exchanges.

Chief Justice John Roberts, who was the object of immense conservative blowback after he joined the court’s liberals three years ago to uphold the law’s individual mandate, again wrote the majority opinion in support of the Obama administration position. He was joined by Justice Anthony Kennedy, who expressed deep reservations when the case was argued about whether striking down the subsidies would coerce states into establishing their own exchanges, and the court’s four liberal justices.

The law’s challengers argued that four words in the statute — “established by the state” — meant that only people who bought insurance from exchanges in the handful of states that set up their own marketplaces would be eligible for tax credits and other government assistance. The government countered that the clear intent of the law was to provide the subsidies for all lower-income Americans who sought coverage.

The court concluded that while the Affordable Care Act was “inartful” and “does not reflect the type of care and deliberation that one might expect of such significant legislation,” Congress still did not mean to exclude millions of people from tax credits. Roberts wrote that “an exchange established by the state” refers to both federal and state exchanges, because the law directs the secretary of Health and Human Services to establish “such exchange” if a state does not do so.

“In every case we must respect the role of the Legislature, and take care not to undo what it has done,” the Court ruled. “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

Story continues

Justice Antonin Scalia read much of his fiery dissent from the bench, seated next to Roberts. The chief justice, who looked grave for most of the morning, cracked a smile when Scalia said, testily, “We should really start calling this law SCOTUScare.” The dissenting justice argued that the Court was attempting to rescue the law by ignoring the statute’s messy contradictions that plaintiffs had argued would make millions of people ineligible for subsidies. Scalia argued that three years ago, the majority used “interpretative somersaults” to save the health care law’s individual mandate, and now it was doing the same thing to save the subsidies.

“The cases will publish forever 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,” Scalia said.

Jessica Ellis, right, with “yay 4 ACA” sign, and other supporters of the Affordable Care Act react with cheers as the opinion for health care is reported outside the Supreme Court in Washington. (Photo: Jacquelyn Martin/AP)



More than 6 million people would have lost those subsidies if the court had ruled against the government, which experts said would lead to skyrocketing premiums and even a potential “death spiral” that could have dealt a mortal blow to Obamacare. The White House insisted in the days leading up to the decision that Obama felt he had nothing to fear because the government’s case was strong. But they are no doubt breathing a sigh of relief.

Around 17 million people have gained coverage from the law, according to a Rand Corp. study, and a recent poll shows that for the first time since it passed, more Americans approve of the law than disapprove.

The case had put Republicans in an awkward spot. Publicly, over the last few weeks, Republican lawmakers expressed their hope in news conferences and speeches that the Supreme Court would rule against the government. But privately, aides conceded that the politics of victory would be more complicated than defeat.

The Republican-led Congress would have been under pressure to come up with at least a temporary fix for the more than 6 million people who would most likely lose their insurance, contorting itself into the odd position of extending subsidies while still opposing the law. (At least one Senate Republican wrote a bill that would temporarily extend the subsidies while phasing out the individual mandate, which would eventually kill the law.) If the Republican majority had just let the subsidies lapse, they’d be faced with angry constituents who just lost coverage and a Democratic PR assault highlighting the most heart-wrenching cases of people who lost their insurance.

Now, things will most likely return to the status quo — in which Republicans threaten to dismantle the president’s signature legislative achievement but do not actually take concrete steps to take health care coverage away from people.