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Why the Affordable Care Act Authorizes Tax Credits on the Federal Exchanges
State Tax Notes (2014)
  • David Gamage, Berkeley Law
  • Darien Shanske
Abstract

This Essay refutes Adler’s and Cannon’s argument that the Affordable Care Act (“Obamacare”) does not authorize premium tax credits for insurance policies purchased from the federal healthcare Exchanges. Adler’s and Cannon’s argument is the basis of challenges in a number of ongoing lawsuits, including Oklahoma ex rel. Pruitt v. Sebelius and Halbig v. Sebelius. This Essay conducts a textual analysis of the Affordable Care Act and concludes that the text clearly authorizes premium tax credits for insurance policies purchased from the federal healthcare Exchanges.

On November 7th, 2014, the U.S. Supreme Court agreed to hear the appeal of the King v. Burwell case. The Supreme Court will thus consider the arguments refuted in this Essay. If the Supreme Court accepts these arguments, commentators expect that the result will dramatically undermine the functioning of Obamacare in many states, potentially generating far worse outcomes than the status quo prior to Obamacare.

Disciplines
Publication Date
February 1, 2014
Citation Information
David Gamage and Darien Shanske. "Why the Affordable Care Act Authorizes Tax Credits on the Federal Exchanges" State Tax Notes Vol. 71 Iss. 4 (2014)
Available at: http://works.bepress.com/david_gamage/17/