June 25, 2015

On June 25, 2015, the US Supreme Court upheld a critical provision of the Affordable Care Act (ACA), holding that Congress intended the ACA’s insurance subsidies to be available nationwide, not only in states with their own insurance exchanges but also in the 34 states with an insurance exchange operated by the federal government. In reaching that conclusion, the Court relied on an amicus brief drafted by the firm, which argued that the economic underpinnings of the ACA require subsidies to be made available for insurance purchased through the federal exchange.  According to the brief, “Congress well understood the importance of subsidies to the ACA reforms.  The basic economic framework undergirding that statute can be analogized to a stool with three legs.  All three legs [non-discrimination rules, individual mandate and premium subsidies] are necessary to foster stable, functioning insurance markets consistent with Congress’ goal of broad, affordable coverage.  Economic modeling confirms what Congress understood:  without premium subsidies for every eligible person who buys insurance on an Exchange, the ACA cannot achieve its goals.”

Chief Justice John Roberts wrote for the majority: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.  If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

The brief, which the Court cited three times, was submitted on behalf of a group of 52 internationally recognized bipartisan economic scholars, including economists who served in the administrations of Presidents Johnson, Ford, Carter, George H.W. Bush, Clinton, George W. Bush and Obama.  The amici include Kenneth Arrow, Peter Diamond and Eric Maskin, recipients of the Nobel Prize in Economic Sciences; Henry Aaron, a former assistant secretary of the Department of Health Education & Welfare; Alice Rivlin, former director of the Congressional Budget Office; and Lawrence Summers and Laura Tyson, former directors of the National Economic Council.

The Jenner & Block team that drafted the brief was led by Partner Matthew S. Hellman and included Partner Matthew E. Price and Associates Julie Straus Harris and Previn Warren.

News of the Court’s opinion was widely reported, including by CNN, The New York Times, The Los Angeles Times, and others.