What's at stake with Affordable Care Act challenge in the Supreme Court?

The Supreme Court has already ruled on the Affordable Care Act based on an early constitutional challenge.  But the law is back at the Court based on a challenge that hinges on just four words in the 2012 law.

CNN provides an easy to understand primer on what's at stake this time around.  Find the article, "The latest Obamacare challenge: What you need to know" here.

The article explains that the law establishes the creation of exchanges "through which individuals can purchase competitively priced health insurance".  Sixteen states and the District of Columbia have set up their own exchanges. Folks living in the other 34 states must use the exchange run by the federal government.  And the law provides federal tax credits to income eligible individuals "to help offset the cost of the policies". 

Most of us remember all of this.  States set up their exchanges where you shop for your healthcare coverage.  Lots of governors or state legislatures chose not to create their own exchanges, so their citizens go to the exchange run by the federal government.  And because everyone is supposed to sign up if they don't have coverage elsewhere, the Affordable Care Act provided federal tax credits to help lower income individuals and families buy coverage. 

Simple enough.  Except, those bringing the case that is now before the Supreme Court say the law did not authorize those tax credits for those having to use the federal run exchange.  That's where the four words in the law passed by Congress comes in. 

A synopsis from the CNN article:

The health care law provides for the establishment of "exchanges" through which individuals can purchase competitively priced health insurance. It also authorizes federal tax credits to low- and middle-income Americans to help offset the cost of the policies. Currently 16 states plus the District of Columbia have set up their own exchanges; the remaining 34 states rely on exchanges run by the federal government. Those bringing the case say that the words "established by the State" in a subsection of the law make clear that subsidies are only available to those living in the 16 states that set up their own exchanges. If the court says the IRS rule is invalid, absent some kind of action by the states or Congress, more than 5 million individuals will no longer be eligible for the subsidies, shaking up the individual market.

So this time around the law in its entirety is not at stake.  But apparently the help through tax credits for 5 million individuals is at stake.  (CNN reports that in 2014, more than 5.3 million individuals selected an insurance plan through the federal exchange.)  We'll find out if Congress goofed or not.

Here is how CNN explains it:

Those challenging the law this time say: Congress limited the subsidies in order to encourage the states to set up their own exchanges. But when only a few states acted, the IRS tried to "fix" the law and wrote a rule allowing subsidies for those living in states with state-run exchanges as well as states with federally run exchanges.

The government, defending the law, says: the language at issue is a "term of art" and that Congress always intended the subsidies to be available to everyone. ... it was clear that some states would not establish their own exchanges.

There is a little technicality that is also interesting.  Challenges must have standing - that is to say that have to show that they are being harmed by the law.  The challengers in this case are residents of Virginia, one of the 34 states that did not create their own exchange.  So these Virginia residents don't get the tax credits.  Without the tax credits they can't afford health care coverage offered through the federal exchange.  So sounds like they want the tax credit.  Apparently not.  Remember the "individual mandate" part of the Affordable Care Act - if you don't get coverage, you get a penalty? 

As CNN explains:

The crux of their argument is that if it were not for the tax credits for premiums, they could not afford health insurance and thus would be exempt from the individual mandate to purchase health insurance.