There’s hopeful news this week on the Obamacare front. The Supreme Court has agreed to hear a challenge to the tax subsidies that keep Obamacare afloat. The Court will review a ruling by a three judge panel of a federal appeals court in Richmond, Virginia which upheld IRS regulations that allow Obamacare tax subsidies in all 50 states.

Language in the ACA states that subsidies are available to individuals that enroll in an insurance plan through “an Exchange established by the State.” The plaintiffs seized upon this language and filed suit arguing that tax subisidies in states which rely on the federal Obamacare exchange are illegal.

The Supreme Court is expected to hear the case the first week of March with a decision expected in late June. At least four justices were needed to grant review.

This distinguishing feature of state-run exchanges as defined in the ACA has enormous implications for the viability of Obamacare. The subsidies in question, quite frankly, provide the basis for the “affordable” in the Affordable Care Act.

Only 16 states set up state-based exchanges, while 34 states rely on the federal exchange. The AP notes that in these 34 states, 4.5 million people receive subsidies which cover on average 76 percent of an individual’s premium.

The AP explained that ACA policyholders pay an average of $82 per month of an average monthly premium of $346. The federal government, therefore, picks up the $264 per month difference.

The National Journal puts the impact of Obamacare subsidies into further perspective quoting a study by the Urban League which concluded “7.3 million people, or about 62 percent of the 11.8 million people expected to enroll in federally facilitated marketplaces by 2016, could lose out on $36.1 billion in subsidies.”

Rep. Darrell Issa explains the importance of this issue in a March 2013 post on his U.S. House website,

“With so many states refusing to play the role the law’s drafters envisioned (i.e. refusing to set-up state exchanges), the Obama administration has embarked on a legally dubious effort to bypass the plain language of the law. Obama’s IRS has issued a rule that delivers the expensive subsidies through federally run exchanges as well. If it stands, this extralegal rule will undermine the decision-making role offered to states by Obamacare, and cause hundreds of billions of dollars of taxes and spending not authorized by the president’s health care law.”

Urban Leagues’ projections make it highly unlikely that the ACA could stand if the Supreme Court rules that subsidies are illegal for individuals in the federal marketplace.  ACA insurance plans would become wholly unaffordable for the overwhelming majority of participants.

Americans will look anxiously on as the Supreme Court decides the case this spring. Much is a stake, but most importantly, our health care freedom.