Supreme Court of the United States
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The financial ramifications of a ruling against the Obama administration could've been huge.

By Claire Zillman
June 25, 2015

In one of the biggest cases in this year’s term, the United States Supreme Court on Thursday ruled that the Affordable Care Act, President Barack Obama’s signature piece of legislature, could provide nationwide subsidies to help low-income Americans purchase health insurance.

The case focused on language in the Obamacare law that seems to say that health care subsidies are available only to people who bought health care on “an exchange established by the state.” The plaintiffs who brought the case argued that that phrase meant that subsidies should not be available to folks who purchased insurance through the federal exchange, Healthcare.gov, that served Americans in the 34 states that refused to set up their own marketplaces.

Read more about the Obamacare decision.

It’s an understatement to say that the stakes in the case, King v. Burwell, were high—and not just on a political level. Had the nation’s top court ruled the other way, the subsidies in states relying on the federal exchange would have disappeared, prompting a spike in the cost of health insurance. Just how big of a spike? Vox reported that the average Obamacare enrollee’s 2015 premiums would have surged some 256%.

Yikes.

A RAND Corporation paper painted a picture that was just as dire. It found that eliminating subsidies in the 34 states that relied on the federal exchange would have increased premiums in the individual insurance market in those states by 47%. The ramifications were not just financial. The end of subsidies would have caused enrollment in the individual market to fall by 70% in those 34 state and left 8 million Americans uninsured.

But the 6-3 decision by the Supreme Court on Thursday determined that all that fear was for naught.

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