(CN) - The latest challenge to federal health care reform to the U.S. Supreme Court tramples legislative intent, Congressmen Nancy Pelosi, Harry Reid and others said in an amicus brief.
At issue in King v. Burwell is a provision of the Affordable Care Act that requires individuals to either buy insurance or pay a penalty. Each plaintiff says they would have been eligible for a hardship exemption if subsidies were not available.
They contend that the tax subsidies were intended only for people who live states that have their own exchanges, and that Congress intended that distinction to encourage state participation in the program.
But the Internal Revenue Service interpreted the law differently, issuing a regulation that said the subsidies are allowed regardless of whether the exchange is run by a state or by the federal government.
The decision by the Supreme Court to take up the case came after an unusual confluence of events.
On July 22, the D.C. Circuit invalidated the IRS regulation that made subsidies available for qualifying middle- and low-income consumers whether they bought health insurance coverage on a state exchange or one run by the federal government.
That same day, the 4th Circuit upheld the IRS regulation and ruled against the King plaintiffs.
If the Supreme Court decides the D.C. Circuit was right, millions of people who received subsidies in the 36 states that use the federal insurance exchanges would instantly become ineligible for them, potential destabilizing the Obama administration's signature legislative accomplishment.
Congressional leaders, including House Democratic Leader Nancy Pelosi and Senate Democratic Leader Harry Reid, and more than 100 state legislators filed an amicus brief Wednesday that urges the high court to rule that the tax credits are available to individuals who purchase insurance on federal exchanges, as well as state-run exchanges.
"Indeed, congressional amici know from their experience drafting and enacting this legislation that Congress imposed no such condition" that premium-assistance credits and subsidies would be unavailable if their state failed to set up its own exchange, the brief states.
"The purpose of the tax credit provision was to facilitate access to affordable insurance through all exchanges, state-run or federally-facilitated, and to ensure that all exchanges could work with other fundamental components of the law in order to provide universal access to insurance," the 56-page brief continues. "It was not, as petitioners would have it, to incentivize the establishment of state exchanges above all else, and certainly not to thwart the overall statutory scheme and Congress's fundamental purpose of making insurance affordable for all Americans."
The legislators claim there is "no evidence" in the legislative record to show that Congress intended to punish individuals buying health insurance in state that did not set up their own exchanges.
In addition, they say that no state legislators recognized such a possibility when debating whether to set up a state exchange, the brief states.
"To win this case, the King challengers would have to convince the court that all these state legislators were completely in the dark about the most important consequence of the decision whether or not to establish a state exchange," the legislators said in a statement announcing the filing.
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