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Supreme Court Upholds Obamacare Subsidies for Health Insurance

Obamacare Subsidies

The tax subsidies provided through the Affordable Care Act, or Obamacare, that currently help 8.7 million Americans afford health insurance have been upheld in a Supreme Court ruling Thursday, reports the Associated Press. The 6-3 ruling upholds Obamacare subsidies regardless of the recipient’s state of residency.

Obamacare Subsidies Average $272 a Month

So far, 10.2 million people have enrolled in health insurance through the marketplaces set up through Obamacare. Eighty-seven percent of those 10.2 million receive subsidies, which average $272 a month, saving the typical recipient around $3,264 a year. The number of uninsured has also fallen since the Affordable Care Act was passed in 2010, from an original 16 percent down to 11.5 percent in 2014, reports CNN Money.

The Supreme Court ruled that the federal health insurance subsidies distributed through Obamacare are legal, despite the claim that language in the Affordable Care Act limits subsidies to recipients in only 16 states. If the Supreme Court had agreed, 6.4 million people could have lost their Obamacare subsidies.

Related: Everything You Didn’t Know About the Affordable Care Act 

Supreme Court Decision a Win for Subsidy Recipients, Insurers and Hospitals

The Obamacare subsidies are clearly a huge win for those 6.4 million Americans who will get to keep this benefit. With each of them saving an average $3,264 annually, that’s $20.9 billion more staying in these recipients’ bank accounts.

But CNN Money reports that the subsidies are also a big win for health insurers, as without this assistance many customers would have been able to continue paying for coverage — especially if they were generally healthy and less likely to need insurance.

“With only sicker patients in their risk pool, insurers would have been forced to raise rates, likely sending the Obamacare individual market into a death spiral,” wrote CNN Money’s Tami Luhby. “Now, insurers can continue to prepare for 2016 open enrollment, which begins in November.”

If the Obamacare subsidies had been overturned, the portion of insured Americans would likely rise once more. This would have hurt hospitals, since the increased coverage provided by Obamacare has helped them wipe out $5.7 billion in uncompensated care,  reports the Los Angeles Times.

Photo credit: LaDawna Howard / Flickr

This article originally appeared on Supreme Court Upholds Obamacare Subsidies for Health Insurance

This article by Elyssa Kirkham first appeared on and was distributed by the Personal Finance Syndication Network.