Federal Appeals Court Invalidates Some ObamaCare Subsidies
A US appeals court has invalidated ObamaCare subsidies for health insurance obtained through the federally-run Healthcare.gov in a decision likely to be appealed to the U.S. Supreme Court.
White House Press Secretary Josh Earnest commented on the decision in today’s briefing.
“We don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs, regardless of whether it was state officials or federal officials who are running the marketplace,” Earnest said, adding that the White House is “confident” in the legal case that the Justice Department will be making.
Read more on the decision from FoxNews.com:
A powerful federal appeals court dealt a major blow to ObamaCare on Tuesday, ruling against the legality of some subsidies issued to people through the Affordable Care Act exchanges.
Though the ruling is likely to be appealed, the decision threatens to gut the foundation of the law by potentially nixing subsidies that millions of people obtained through the federally run exchange known as HealthCare.gov.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled2-1 that the IRS went too far in extending subsidies to those who buy insurance through that website.
The suit maintained that the language in ObamaCare actually restricts subsidies to state-run exchanges -- of which there are only 14 -- and does not authorize them to be given in the 36 states that use the federally run system.
The court agreed.
“We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly,” the ruling stated.
The case, Halbig v Burwell, is one of the first major legal challenges that cuts to the heart of the Affordable Care Act by going after the legality of massive federal subsidies and those who benefit from them.
“This case is about Appellants’ not-so-veiled attempt to gut the Patient Protection and Affordable Care Act (“ACA”),” the dissent opinion stated.
The ruling, though likely to be appealed, could threaten the entire foundation of the newly devised health care system. Nearly 90 percent of the federal exchange’s insurance enrollees were eligible for subsidies because of low or moderate incomes, and the outcome of the case could potentially leave millions without affordable health insurance.
The next step for the Obama administration would be that they request an en banc ruling, which means there would be a vote taken by all of the judges on the court. An appeals court can only overrule a decision made by a panel if the court is sitting en banc.
“Today’s decision represents the high-water mark for Affordable Care Act opponents, but the water will recede very quickly,” Ron Pollack, founding executive director of Families USA, said in a written statement.
Pollack added, “It will inevitably be placed on hold pending further proceedings; will probably be reheard by all of the 11-member active D.C. Circuit Court of Appeals members, who predictably will reverse it; and runs contrary to an expected ruling on a similar case in the Fourth Circuit Court of Appeals.”
The appeals process could eventually lead to the U.S. Supreme Court deciding on the legality of the subsidies, but Pollack, whose group supports the law, believes that won’t happen.
Of the 11 judges that could rehear the case, seven are Democrats and four are Republicans.
Halbig v.Burwell, which had been previously called Halbig v. Sebelius, is one of four federal lawsuits that have been filed aimed at targeting the idea of tax credits and other subsidies afforded under ObamaCare.
A total of $1 trillion in subsidies is projected to be doled out over the next decade.
A U.S. District Court previously sided with the Obama administration on Jan. 15.