However, until this is resolved likely by the Supreme Court we will have to see where all this actually goes.
In Blow to Health Law, Appeals Court Limits Subsidies
| New York Times | - |
WASHINGTON
- In a ruling that could upend President Obama's health care law, a
federal appeals court ruled Tuesday that the government could not
subsidize premiums for people in three dozen states that use the federal
insurance exchange.
Fed appeals court panel says most Obamacare subsidies illegal http://www.cnbc.com/id/101819065
Fed appeals court panel says most Obamacare subsidies illegal Dan
Mangan | @_DanMangan In a potentially crippling blow to Obamacare, a
federal appeals court panel declared Tuesday that government subsidies
worth billions of dollars that helped 4.7 million people buy insurance
on HealthCare.gov are illegal. A judicial panel in a 2-1 ruling said
such subsidies can be granted only ...
In Blow to Health Law, Appeals Court Limits Subsidies
WASHINGTON
— In a ruling that could upend President Obama’s health care law, a
federal appeals court ruled Tuesday that the government could not
subsidize premiums for people in three dozen states that use the federal
insurance exchange. The 2-to-1 ruling could cut off financial
assistance for more than 4.5 million people who were found eligible for
subsidized insurance in the federal exchange, or marketplace.
Under
the Affordable Care Act, the court said, subsidies are available only
to people who obtained insurance through exchanges established by
states.
The
law “does not authorize the Internal Revenue Service to provide tax
credits for insurance purchased on federal exchanges,” said the ruling,
by a three-judge panel of the United States Court of Appeals for the
District of Columbia Circuit. The law, it said, “plainly makes subsidies
available only on exchanges established by states.”
For many people, their share of premiums could increase sharply, making insurance unaffordable.
The
decision is the not the last word, however, as other courts are
weighing the same issue. And the ruling could be reviewed by the full
appeals court here.
The
decision by the appeals court here is important because the federal
exchange serves states with about two-thirds of the nation’s population.
In federal and state exchanges, people may qualify for subsidies if
they have incomes of up to $45,960 for individuals and up to $94,200 for
a family of four.
The health care law authorized subsidies specifically for insurance bought “through an exchange established by the state.”
Obama
administration officials said that an exchange established by the
federal government was, in effect, established by a state because the
secretary of health and human services was standing “in the shoes” of
states when she established exchanges.
When
the health care law was adopted in 2010, Mr. Obama and Congressional
Democrats assumed that states would set up their own exchanges. But many
Republican governors and state legislators balked, and opposition to
the law became a rallying cry for the party.
Similar
lawsuits challenging subsidies under the Affordable Care Act are
pending in other courts, which could reach different conclusions. In
February, a federal district judge in Richmond, Va., upheld subsidies in
the federal exchange. While plaintiffs’ interpretation of the law has
“a certain common sense appeal,” the judge said, “there is no evidence
in the legislative record” that Congress intended to make tax subsidies
conditional on a state’s decision to create an exchange.
Stuart
F. Delery, an assistant attorney general, told the appeals court here
in March that Congress had intended for subsidies to be available
nationwide to low- and moderate-income people, regardless of whether
they obtained insurance on a federal or state exchange.
Subsidies,
in the form of tax credits, are a crucial element of the Affordable
Care Act. Without them, insurance would be unaffordable to millions of
Americans. The Congressional Budget Office estimates that subsidies this
year will average $4,400 for each person who receives a subsidy.
The
lawsuit here was filed by several people in states that use the federal
exchange: Tennessee, Texas, Virginia and West Virginia. They objected
to being required to buy insurance even with subsidies to help defray
the cost.
Congress,
they said, confined the subsidies to state exchanges for a reason: It
wanted to provide an incentive for states to establish and operate
exchanges, rather than leaving the task to the federal government.
Obama
administration officials said that argument was absurd. The overriding
purpose of the Affordable Care Act, they said, was to ensure access to
health care for nearly all Americans, wherever they live.
Of
the 8 million people who selected private health plans from October
through mid-April, 5.4 million obtained coverage through the federal
exchange, and most of them qualified for subsidies that reduce their
premiums.
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