The United States Supreme Court will hear the case challenging the subsidies under the Affordable Care Act.
Supreme Court Agrees To Hear New Obamacare Case
November 7, 2014

The United States Supreme Court just agreed to hear the case that never should have made it to their doorstep -- King v. Burwell.

This is terrible news for everyone, given that we now don't have a Congress to fix the error that created the case in the first place. Chief Justice Roberts has had two years to receive outraged cries from his conservative Federalist Society pals about the last ruling on the ACA, and so it's probable he'll cave to them this time around.


The Supreme Court will hear the case early next year, and we would probably expect a ruling in late June. Until then, subsidies will continue to flow as normal.

It's anyone's guess how the high court will rule — but if it strikes down subsidies on the federally-run exchanges, the IRS will have to rapidly issue guidance and cease disbursement of subsidies in affected states. However, people would not owe back the financial assistance that they had received up to that point.

Without subsidies in federally-run exchanges, premiums would become unaffordable for millions of families, and many would probably drop coverage. Generally speaking, they would not face the individual mandate penalty because the law includes an exemption where the cheapest available coverage exceeds 8% household income.

Some states would work rapidly to implement a state-based exchange, redeeming subsidies for their citizens.

Obamacare has some rules about who the state can delegate exchange duties to, and those rules would forbid states from contracting directly with, but it doesn't foreclose use of the website altogether.

Updated to correct case name from Halbig v. Burwell to King v. Burwell

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