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Fed Appeals Court Panel Says Most Of Obamacare Subsidies Illegal
By Dan Mangan, Jul. 22, 2014, Cnbc.com
In a dramatic split decision, two federal appellate panels Tuesday disagreed on the legality of Obamacare subsidies that gave billions of dollars to help 4.7 million people buy insurance on HealthCare.gov.
A panel of federal appeals court that covers Washington, D.C., ruled 2-1 that the subsidies are illegal if issued through a federal, rather than state-run, Obamacare exchange.
But about two hours later, a panel from the Fourth U.S. Circuit Court of Appeals ruled 3-0 in a separate case that the subsidies are legal for people who buy plans on HealthCare.gov, which the federal government operates in 36 states.
The split could mean the cases will soon land before the U.S. Supreme Court.
The stakes are immense because the subsidies are the linchpin to Obamacare mandates requiring people obtain affordable health insurance as of this year or pay a fine, and the rule beginning next year forcing mid- to large-sized employers to offer such insurance or pay a tax penalty. If they aren't legal in HealthCare.gov-served states, the employer mandate would be eliminated, and the individual mandate would be crippled.
In the D.C. circuit case, the panel said such subsidies can be granted only to people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia—not on the federally run exchange.
The ruling relied on a close reading of language in the Affordable Care Act.
"Section 36B plainly makes subsidies available in the Exchanges established by states," wrote Senior Circuit Judge Raymond Randolph, who was joined by Judge Thomas Griffith in the majority decision on the case known as Halbig v. Burwell.
"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."
In a dramatic split decision, two federal appellate panels Tuesday disagreed on the legality of Obamacare subsidies that gave billions of dollars to help 4.7 million people buy insurance on HealthCare.gov.
A panel of federal appeals court that covers Washington, D.C., ruled 2-1 that the subsidies are illegal if issued through a federal, rather than state-run, Obamacare exchange.
But about two hours later, a panel from the Fourth U.S. Circuit Court of Appeals ruled 3-0 in a separate case that the subsidies are legal for people who buy plans on HealthCare.gov, which the federal government operates in 36 states.
The split could mean the cases will soon land before the U.S. Supreme Court.
The stakes are immense because the subsidies are the linchpin to Obamacare mandates requiring people obtain affordable health insurance as of this year or pay a fine, and the rule beginning next year forcing mid- to large-sized employers to offer such insurance or pay a tax penalty. If they aren't legal in HealthCare.gov-served states, the employer mandate would be eliminated, and the individual mandate would be crippled.
In the D.C. circuit case, the panel said such subsidies can be granted only to people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia—not on the federally run exchange.
The ruling relied on a close reading of language in the Affordable Care Act.
"Section 36B plainly makes subsidies available in the Exchanges established by states," wrote Senior Circuit Judge Raymond Randolph, who was joined by Judge Thomas Griffith in the majority decision on the case known as Halbig v. Burwell.
"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."
Read the full story: www.cnbc.com
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