The Biggest Takeaways From the Supreme Court Obamacare Ruling

Scalia derides Roberts's reasoning as "pure applesauce"

Breaking Down the SCOTUS Obamacare Ruling

For the second time in three years, the Supreme Court has upheld President Barack Obama's health-reform law. This time the vote was 6-3, with Chief Justice John Roberts writing for a majority that also included Justice Anthony Kennedy and, more predictably, the high court's four-member liberal wing. What does this mean?

Business can get back to business

If the high court had invalidated the Obamacare tax credits used by millions of Americans to buy insurance, employers of all sorts would have faced utter chaos (not to mention the disruption all those individuals would have suffered). Courtesy of Chief Justice Roberts's pragmatic opinion, mayhem will not ensue.

Kim Wilcoxon, a partner specializing in employee benefits and executive compensation at the corporate law firm Thompson Hine, called the ruling "not surprising" in that it upheld an interpretation by the IRS "based on a full reading of an ambiguous statute." Wilcoxon added that "because the Affordable Care Act consists of tightly woven interconnected threads, any other outcome would have unraveled the act. All of the work, sweat, and tears that have gone into—and continue to go into—implementation of the act have been validated by today’s decision. It’s business as usual, so employers should continue to focus their efforts on addressing the employer mandate and the new reporting requirements.” 

This was conservatives' best shot at killing Obamacare

The Roberts-led majority said the 2010 ACA allows tax credits in all 50 states, not just the 16 that have authorized online insurance exchanges, as conservative challengers argued. The decision preserves subsidies meant to make health coverage possible for millions of uninsured Americans. In 2012, a narrower 5-4 Supreme Court ruling, with Roberts in the majority and Kennedy dissenting, rejected a constitutional challenge to Obamacare. This time around, the six-member majority rebuffed a statutory attack based on a four-word phrase. The provision states that individuals may get tax credits when they obtain insurance on an exchange "established by the state." Roberts said that the Supreme Court should not fixate on the wording glitch and instead should defer to the IRS's interpretation of an admittedly convoluted law.

"Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them," the chief justice wrote. "If at all possible, we must interpret the act in a way that is consistent with the former and avoids the latter." As a practical matter, Republicans who since the moment after it was enacted have been assaulting Obamacare in the courts and Congress will have to turn their attention to the 2016 presidential election. That's their next opportunity to pursue repeal.

Agree or disagree with Scalia, you gotta admire his bilious ire

Justice Antonin Scalia, who wrote the dissent for himself and Justices Clarence Thomas and Samuel Alito, fully lived up to his reputation as the voice of angry formalist resistance. "The court," Scalia wrote, holds that when the [ACA] says 'exchange established by the state' it means 'exchange established by the state or the federal government.' That is of course quite absurd, and the court’s 21 pages of explanation make it no less so."  Elsewhere in his dissent, Scalia derides Roberts's reasoning as "pure applesauce."

Scalia added the majority had twisted legal logic for partisan purposes. "We should start calling this law 'SCOTUScare,' he wrote, borrowing the acronym for Supreme Court of the United States. The ruling indicates that the high court "favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites."

Next up: gay marriage!

Before it's here, it's on the Bloomberg Terminal. LEARN MORE