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Ruling will allow nearly 57,000 Nebraska residents to keep health insurance subsidies

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LINCOLN, Nebraska — Nearly 57,000 Nebraska residents will continue to receive tax subsidies for federal health care insurance plans now that the U.S. Supreme Court has rejected conservatives' challenge to the Affordable Care Act.

The 6-3 ruling on Thursday helps avoid a situation in which premiums could have soared for Nebraska's entire individual insurance market, possibly forcing many recipients to drop their coverage.

Here are some key things to know about the ruling and its impact on Nebraska:

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HOW DID NEBRASKA BECOME INVOLVED?

All states were required to have a health care marketplace where consumers could comparison shop for insurance. The law gave states the option of creating and running their own marketplace, defaulting to one set up by the federal government or taking a hybrid approach.

Nebraska was one of 34 mostly conservative states that defaulted to the federal marketplace rather than creating its own.

At issue in the court case was whether states with the federal marketplace should qualify for tax credits to help with the cost of health insurance. Challengers to the law argued that its literal wording only allowed subsidies for marketplaces "established by the state," while the Obama administration said the law's intent was to provide subsidies to all qualified enrollees.

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WHY DID NEBRASKA OPT AGAINST A STATE-RUN MARKETPLACE?

Former Gov. Dave Heineman announced in 2012 that Nebraska would join a marketplace set up by the federal government.

The Republican vehemently opposed the federal health care law, said that the federal option was cheaper for the state and argued that state-run models were still heavily controlled by the federal government.

A new state oversight commission agreed in December. The Nebraska Exchange Stakeholder Commission said building a state-run marketplace would prove "difficult at best," given the lack of federal funding and problems some other states experienced with their systems.

Some advocacy groups that support the law say Nebraska should have chosen a state-run marketplace to provide more local control. Proponents point to states like Kentucky, whose state marketplace has been touted as a success.

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WHY ARE THE TAX CREDITS SO IMPORTANT?

The tax credits were created to help cover the cost of insurance for low- and middle-income Americans, including in Nebraska. Had the court struck them down, premiums in Nebraska could have soared by an average of 265 percent.

Nebraska receives an average of $14.6 million a month — about $257 per enrollee — to help pay for premiums, according to the Kaiser Family Foundation.

Eliminating the tax credits likely would have raised prices for the entire individual marketplace, and not just for those who receive them, because younger and healthier people who help subsidize the pool would have been more likely to drop their plans.

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DOES THIS END THE DEBATE?

While the case was viewed as the last serious challenge to the federal health care law, supporters in Nebraska say they plan to push for more. Opponents remain fervently against it.

An advocacy group for low-income Nebraska residents praised the decision Thursday but argued the state still needs to expand Medicaid coverage under the federal health care law. State lawmakers have rejected expansion attempts three times in as many years.

"Today's ruling underscores that we should fully implement all the opportunities under the ACA to strengthen our health care system and improve Nebraskans' lives," said James Goddard, an attorney for Nebraska Appleseed. "The next step should be to expand Medicaid and ensure every Nebraskan can get health coverage."

Groups that opposed the law argued it will continue to impose a regulatory burden.

"Although the Supreme Court upheld these controversial subsidies, that doesn't mean that families, individuals, or businesses here in Nebraska will see any relief from the harmful effects of this law," said Matt Litt, state director of Americans for Prosperity-Nebraska.

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