Two federal appeals courts have given conflicting rulings regarding a federal regulation implementing key subsidies of President Barack Obama's signature healthcare law Tuesday, with one court invalidating some of them and the other upholding all of them, Fox News reported. The rulings are the latest in a series of legal challenges to key planks of Obama's health care law.
The first decision came Tuesday morning after a three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled 2-1 that the IRS went too far in extending subsidies to those who buy insurance through the federally run exchange, known as HealthCare.gov., BBC News reported. The subsidies provide cash help to low and middle income earners buying health insurance on federal exchanges.
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.
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. "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," Senior Circuit Judge Raymond Randolph in his majority opinion ruling against the Obama administration's position.
"The court - considered the second highest in the nation behind the U.S. Supreme Court - returned the case to a lower court with instructions to rule in favor to plaintiffs who had fought against the subsidies being offered in 36 states," according to BBC News. "The IRS is said to have dispensed billions of dollars in taxpayer subsidies through federal healthcare exchanges, or marketplaces. Plaintiffs in the lawsuit argued they were injured by the IRS actions because it triggered additional taxes for employers."
"The ruling, though likely to be appealed, could threaten the entire foundation of the newly devised health care system," Fox News reported. "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."
In a separate decision issued by the Fourth Circuit Court of Appeals for Virginia hours later, the three-judge panel ruled unanimously to uphold the Obamacare tax credits. Since the wording of the healthcare law was too ambiguous, the court found that it restricted availability of such government funds.
White House Press Secretary Josh Earnest stressed Tuesday that while different courts have reached different conclusions on the subsidy issue, the latest ruling against the subsidies "does not have any practical impact" at this point on the ability of people to get tax credits. According to Fox News, the White House later said the D.C. decision was "undermined" by the Fourth Circuit decision.
