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Nov. 7 — The U.S. Supreme Court agreed to consider a challenge to tax subsidies that are a linchpin of President Barack Obama's health-care overhaul, accepting a case that suddenly puts the law under a new legal cloud.
Two years after upholding much of the law by a single vote, the justices said Nov. 7 that they will hear a Republican-backed appeal targeting tax credits that have helped more than 4 million people afford insurance.
A ruling blocking those credits might unravel the Affordable Care Act, making other provisions ineffective and potentially destabilizing insurance markets in much of the country. The high court's decision to hear the case came days before the start of the law's second open-enrollment season. A decision will come by June.
“It's hard to avoid the thought that the four justices who tried to get rid of the Affordable Care Act the first time around are taking a second crack at it,” said Timothy Jost, a supporter of the measure who teaches at Washington and Lee University School of Law in Lexington, Va.
The court most likely will hear arguments during the first week of March.
The justices will consider an appeal filed by four Virginia residents seeking to block the subsidies in 36 states. The appeal says the Obama administration is engaging in a “gross distortion” of the law's wording by granting billions of dollars in tax credits to people in those states.
The appeal, filed by Washington lawyer Michael Carvin on behalf of four Virginia residents, said immediate review was “imperative” given the money at stake and the steps being taken by employers, consumers and insurers to comply with the measure.
At the White House, Obama administration spokesman Josh Earnest defended the ACA.
“This is a law that is working and has generated significant benefits for working families and small-business owners all across the country, and that's why you're going to see a vigorous defense” by the administration, Earnest said.
The law, intended to provide coverage to tens of millions of uninsured Americans, has been attacked by Republicans since it was passed on a party-line vote in 2010.
More than 100,000 anti-ACA advertisements aired before the Nov. 4 midterm election as Republicans sought to exploit what they saw as a Democratic liability. While many provisions are popular, a majority of Americans say they disapprove of the law, polls show.
Enrollment for the second year of coverage under ACA plans began on Nov. 15 and closes Feb. 15. The Congressional Budget Office has estimated that 13 million people will be signed up next year.
The justices endured a divisive clash when they upheld most of the law in 2012, punctuated by reports that Chief Justice John Roberts switched sides late in the court's deliberations to provide the decisive vote. Roberts joined the court's four Democratic appointees—Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan—in the majority.
©2014 Bloomberg L.P. All rights reserved. Used with permission.
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