The Patient Protection and Affordable Care Act (“ACA” or “Act”) includes a series of measures that will expand the availability of affordable health coverage. Of particular relevance here, the Act provides for the establishment of new health insurance Exchanges, in which the purchasing power of individuals and small businesses will be combined so that they can buy more affordable insurance. States will establish and operate these Exchanges or, where a state chooses not to do so consistent with federal standards, the federal government will establish and operate the Exchange in place of the state. The Act provides for financial assistance and tax incentives to encourage the purchase of insurance, including premium tax credits for eligible individuals to help defray the cost of insurance purchased through the Exchanges. 26 U.S.C. § 36B. These tax credits, when they become available in 2014, will provide substantial financial assistance to millions of Americans for the purchase of affordable health insurance.
The plaintiffs here seek to interfere with the Treasury Department’s administration of these tax credits. They contend that they reside in states where the federal government will operate the Exchange, and they read the Affordable Care Act to prohibit the allowance of premium tax credits to individuals purchasing insurance through the Exchanges in these states. The plaintiffs’ reading of the Act is wrong; Congress made clear that an Exchange established by the federal government stands in the shoes of the Exchange that a state chooses not to establish, see 42 U.S.C. § 18041(c)(1), and the Treasury Department has reasonably interpreted the Act to provide for eligibility for the premium tax credits for individuals in every state, regardless of which entity operates the Exchange.