Updated: Courts issue contradictory rulings regarding federal health insurance subsidies
The Obama Administration says people who bought subsidized health insurance plans through the federal HealthCare.gov site will keep receiving the subsidies as the administration sorts out legal implications from a pair of contradictory rulings issued by two federal appeals courts on Tuesday.
First, a D.C. Circuit Court of Appeals judicial panel said in a 2-1 ruling Tuesday morning that the subsidies, worth billions of dollars, can be granted only to those people who bought health insurance in a state-run insurance exchange or the District of Columbia – but not on the federally run HealthCare.gov site used by the 36 states that did not set up their own exchanges.
"Section 36B plainly makes subsidies available in the Exchanges established by states," wrote Senior Circuit Judge Raymond Randolph in his majority opinion, where he was joined by Judge Thomas Griffith. "We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly."
Then a little later on Tuesday, a three-judge panel at the 4th U.S. Circuit Court of Appeals in Richmond, Va., unanimously came to the opposite conclusion in a similar case, ruling that the IRS correctly interpreted the will of Congress when it issued regulations allowing consumers in all states to purchase subsidized health insurance.
In the D.C. case, Halbig et al. vs. Burwell et al. (Case Number 14-5018), a group of small business owners argued that the ACA authorizes subsidies only for people buying health insurance through state-run exchanges and not from the federal HealthCare.gov site, which covers 36 states that did not establish their own exchanges.
In the Richmond, David King; Douglas Hurst; Brenda Levy; Rose Luck v. Sylvia Matthews Burwell (Case Number 14-1158), the case revolved around just four words in the ACA, where it says the tax credits are available to people who enroll through an exchange "established by the state."
In an opinion explaining the ruling, Circuit Judge Roger Gregory writes that it's not clear how large a role Congress expected HHS-run exchanges to play.
"Without only 16 state-run exchanges currently in place, the economic framework supporting the act would crumble if the credits were unavailable on federal exchanges," Gregory says. "Furthermore, without an exception to the individual mandate, millions more Americans unable to purchase insurance without the credits would be forced to pay a penalty that Congress never envisioned imposing on them."
Both cases reached appeals courts as part of a long-running campaign by Republicans to overturn the ACA.
For more about Today’s rulings and to comment, visit this thread on the Forum.
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