Politics & Government

Federal Courts Issue Conflicting Rulings on Obamacare Subsidies

Two federal judicial panels delivered conflicting rulings within hours of each other Tuesday on how the government should subsidize insurance premiums in states using Obamacare.

Two federal appeals court panels issued conflicting rulings Tuesday on how the government should subsidize health insurance premiums for those in the 36 states using Obamacare's federal insurance exchange.

A three-judge panel of the 4th U.S. Circuit Court of Appeals for the District of Columbia ruled 2-1 in the Halbig vs. Burwell case that the Affordable Care Act restricts insurance premium subsidies only to consumers who purchase private health plans through state-run exchanges. The law “does not authorize the Internal Revenue Service to provide tax credits for insurance purchased on federal exchanges,” according to the three-judge panel in Washington.

"The fact is that the legislative record provides little indication one way or the other of congressional intent, but the statutory text does,” wrote the two judges in the majority, Thomas Griffith and Arthur Randolph, both appointed by Republican presidents. “(It) plainly makes subsidies available only on exchanges established by states. And in the absence of any contrary indications, that text is conclusive evidence of Congress’s intent."

The judges later suspended the ruling pending an appeal by the Obama administration, Reuters reports. The White House anticipates the Justice Department will ask the appeals court to review the ruling.

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“We believe that this decision is incorrect, inconsistent with congressional intent, different from previous rulings and at odds with the goal of the law: to make health care affordable no matter where people live,” said Emily Pierce, a spokeswoman for the Department of Justice, in a statement. “The government will therefore immediately seek further review of the court’s decision.”

“In the meantime,” Pierce said, “to be clear, people getting premium tax credits should know that nothing has changed. Tax credits remain available.”

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A few hours later, a three-judge panel of the 4th U.S. Circuit of Appeals in Richmond, Va. voted unanimously to uphold the legality of the IRS rule allowing subsidies in federal exchanges, claiming “the applicable statutory language is ambiguous and subject to multiple interpretations.”

Federal Judge Roger Gregory wrote that the law’s challengers could not “rely on our help to deny to millions of Americans desperately-needed health insurance through a tortured, nonsensical construction of a federal statute whose manifest purpose, as revealed by the wholeness and coherence of its text and structure, could not be more clear.”

Reuters notes that Tuesday’s ruling fell in line with partisan ideologies over the Affordable Care Act, with two Republican-appointed judges ruling against the law in the District of Columbia court and three Democratic-appointed judges ruling in favor in Richmond.

“Today’s ruling is also further proof that President Obama’s health care law is completely unworkable.  It cannot be fixed," House Speaker John Boehner said in a statement

The Washington ruling could cause many people to see sharp increases in insurance premiums. As many as 5 million people in 36 states could be affected if subsidies disappear from the federal marketplace, available through HealthCare.gov. Subsidies are currently available to those with incomes below 400 percent of the poverty level, or roughly $94,200 for a family of four, Reuters reports.


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