The U.S. Supreme Court upheld a core component of President Barack Obama’s health-care law, backing tax credits used by millions of Americans to buy insurance and preserving the landmark measure that will define his legacy.
The 6-3 ruling eliminates the most potent legal challenge to a law designed to cover at least 30 million uninsured people and averts a collapse in state insurance markets. Chief Justice John Roberts and Justice Anthony Kennedy joined the court’s four Democratic appointees in the majority. They said the 2010 Affordable Care Act allows tax credits in all 50 states, not just the 16 that have authorized their own online insurance exchanges.
“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Roberts wrote. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”
The ruling is the high court’s second in three years to preserve Obamacare in the face of Republican-backed legal attacks. Republican opponents now must look to winning the White House in the 2016 election if they hope to roll back the law.
The Affordable Care Act “is here to stay,” Obama said at the White House. “What we’re not going to do is unravel what has now been woven into the fabric of America,” the president said. “I can work with Republicans and Democrats to move forward. Let’s join together. Make health care in America even better.”
Hospitals led a rally among health-care companies after the ruling. HCA Holdings Inc., the largest for-profit hospital chain, gained 8.8 percent to $90.72 at 4 p.m. in New York. Tenet Healthcare Corp. jumped 12.2 percent and Community Health Systems Inc. added 13.0 percent.
Stock gains at insurers were smaller, in part because subsidized customers make up a small proportion of the total at the biggest firms. UnitedHealth Group Inc., the largest U.S. health insurer, rose 2.7 percent to $122.33.
The decision also helps ease the path to dealmaking among health insurers. Bloomberg News reported today that Aetna Inc. could reach a deal to acquire Humana Inc. as early as this weekend. Anthem Inc. went public with a bid for Cigna Corp. on June 20 that Cigna rejected. Groups representing hospitals and doctors praised the ruling. Steven Stack, the president of the American Medical Association, said his group is “relieved.” The American Hospital Association said the decision was a “significant victory for protecting access to care for many of those who need it.”