WASHINGTON—A federal district court held Thursday that the Obama administration’s payments to insurance companies under Obamacare are unconstitutional, since Congress has declined to pass spending bills funding those payments.
Section 1401 of the Affordable Care Act (ACA, or Obamacare) provides taxpayer subsidy payments to people buying insurance from an Obamacare exchange.
Although the ACA provides that such payments are for purchasing insurance from an “exchange established by a state,” the Supreme Court held in a 6-3 decision in King v. Burwell that “established by a state” also includes the federal government, in addition to states. The three conservative justices on the Supreme Court at the time (Antonin Scalia, Clarence Thomas, and Samuel Alito) sharply criticized that decision in an energetic dissent, but it remains the law today.