Colorado Probate Blog - Wade Ash Woods Hill & Farley, P.C.

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Health Insurance Subsidies Confirmed to be Available to Taxpayers in all States

On June 25, 2015, the Supreme Court of the United States held in the King v. Burwell decision that tax credits for health insurance premiums are available to taxpayers in every state, regardless of whether those taxpayers live in a state which has established its own health insurance exchange or a state which instead uses a federally-established exchange.  Chief Justice Roberts delivered the 6-3 decision.

The tax credits, which are available pursuant to Internal Revenue Code (“Code”) Section 36B, and which are also known as health insurance subsidies, are a key provision of the Affordable Care Act (“Act”).  The petitioners asserted that certain language in the Act limited the availability of health insurance subsidies only to those persons living in states with state-operated exchanges.  The Court, however, found the disputed language to be ambiguous when read alongside Code Section 36B and when considered as an important part of the overall functionality of the Act.  The Court reasoned that Congress would not have intended the Act to apply only in those states with state-run exchanges, and therefore concluded that the ambiguous language must be resolved in favor of making the tax credits available to persons in every state, regardless of the nature of the exchange from which insurance was purchased.

Despite much criticism levied against it, the Act has significantly reduced the number of uninsured Americans and made health insurance more affordable.  The King decision is a strong victory for supporters of the Act which firmly puts to rest one of the strongest arguments against its implementation. 



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