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U.S. Supreme Court set to hear second major Obamacare challenge

WASHINGTON (Reuters) – The U.S. Supreme Court will weigh a second major case targeting President Barack Obama’s healthcare law on Wednesday when it considers a conservative challenge to tax subsidies critical to the measure’s implementation.

The case is set for a one-hour oral argument starting just after 10 a.m. (1500 GMT), with a ruling due by the end of June.

If a majority of the nine justices rules against the administration, up to 7.5 million people in at least 34 states would lose subsidies that help low- and moderate-income people afford private health insurance, unless Congress or the affected states act immediately.

Such a ruling could also have a broader impact by deterring younger, healthier people from buying health insurance, which would lead to premiums rising for older, less healthy people who need healthcare most, said Rand Corporation economist Christine Eibner.

“It would cause major disruption to the individual insurance market,” Eibner added.

The Democratic-backed law, narrowly passed by Congress over unified Republican opposition, aimed to help millions of Americans who lacked any health insurance afford coverage.

The case does not affect people who obtain health insurance through their employer.

The legal question is whether only people who have bought insurance on state exchanges qualify for the tax-credit subsidies.

Thirteen states and the District of Columbia have set up such exchanges, with another 34 run by the federal government and three operating as state-federal hybrids.

In a Reuters interview on Monday, Obama said there is “not a plausible legal basis” for the court to rule against the law, calling the matter a “pretty straightforward case of statutory interpretation.”

The first time the 2010 Affordable Care Act, dubbed Obamacare, came before the justices three years ago, the court was split 5-4. Chief Justice John Roberts, a conservative appointed by President George W. Bush, was the key swing vote, siding with the court’s four liberals to uphold the law on constitutional grounds.

Roberts and fellow conservative Justice Anthony Kennedy are the most likely swing votes in the new case.

The court will be focusing on whether a four-word phrase in the law has been correctly interpreted by the administration to allow subsidies to be available nationwide.

That provision says subsidies are available to those buying insurance on exchanges “established by the state.” The challengers, financed by a libertarian Washington group called the Competitive Enterprise Institute, say the government should lose based on the plain meaning of that phrase.

The government, backed by the healthcare industry, says other provisions make clear Congress intended the subsidies to be available nationwide regardless of whether states set up their own exchanges or leave the task to the federal government.

The case is King v. Burwell, U.S. Supreme Court, No. 14-114.

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