A key element the Act – the way the administration is distributing subsidies – is the subject a challenge that the Supreme Court today (Nov. 7, 2014) agreed to hear.

Plaintiffs in the case, King v. Burwell, argue that the federal practices for handling the subsidies goes beyond what the 2010 Act authorized, and is therefore an unconstitutional encroachment on authority to control federal spending.

The core the case is the interpretation four words in the massive law. The authorizes subsidies to consumers who purchase through an exchange “established by the state.”

Prior to the passage the law, governors several states had announced their unwillingness to establish exchanges (online markets) in their states.

Apparently in response to these announcements, the law included a provision requiring the federal government to exchange services in states that do not set up their own exchange, and allowing residents in those states to purchase via the federal exchange.

However, the drafters the law did not include specific language authorizing subsidy payments to purchasers in states without exchanges.

A friend–the-court brief filed by six senators and two representatives, all Republicans, argues that the administration’s “extension subsidies beyond State exchanges rewrites the and improperly encroaches upon Congress’s lawmaking function.” The administration’s actions would result in “tens billions dollars unlawful spending in the next year, and hundreds billions over the next decade,” they argued.

Conflicting decisions by lower courts made the Supreme Court’s decision to hear the case almost inevitable.  The U.S. Fourth Circuit Court Appeals, inRichmond, VA, on July 22, 2014, ruled in favor the administration, while on the same the Court Appeals for the District Columbia ruled the other way.

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