decision that the federal subsidies that help nearly 6.4 million people pay for their Obamacare health plans are legal under the Affordable Care Act.
The ruling avoids what many analysts predicted would be a nightmare scenario if the plaintiffs had won: individual plan insurance prices skyrocketing in two-thirds of the United States, and the loss of health coverage for upwards of 8 million people in states served by the federal insurance marketplace HealthCare.gov by next year.
"Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them," Chief Justice John Roberts wrote in the majority decision.
The Supreme Court decision is a huge victory for the administration of President Barack Obama and his landmark health-reform law, which was designed to significantly reduce the number of Americans without health coverage.
In its ruling in the case known as King v. Burwell, the high court accepted the administration's argument that the ACA allows federal tax credits to be issued to people who buy health plans through a federally run Obamacare exchange. Joining Roberts in the majority decision were Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotamayor and Elena Kagan.
Plaintiffs had argued that only customers of state-run exchanges can receive such financial help, the Supreme Court found. Just 17 such exchanges that sell insurance plans from private insurers are currently run by a state or the District of Columbia.
If the court had ruled for the plaintiffs, it would had effectively created a segregated country in terms of individual health insurance, the coverage people buy outside of their jobs. People in most of the country would have only be able to buy such insurance by paying the full retail price, while in one-third of the U.S. many people will be eligible for financial aid to offset the cost of their coverage.
Because of the key role that subsidies play in the ACA, the Supreme Court's decision in the HealthCare.gov states also kept in place the so-called "employer mandate," which requires larger employers to offer affordable health insurance to their workers or pay a fine. The ruling also keeps intact the individual mandate that requires most Americans to have some form of health coverage or pay a tax penalty.
The decision also takes pressure off the Republican-controlled Congress. If the court had invalidated the HealthCare.gov subsidies, some Republicans were prepared to extend the financial aid in the 34 affected states through as long as 2017, when the next president takes office.