Dueling Appeals Court Decisions Leave Obamacare Subsidies In Limbo

Jul 23, 2014
Originally published on July 24, 2014 6:57 am

Some Obamacare insurance subsidies were struck down by one court but upheld by another during a tumultuous day for the Affordable Care Act. One of the rulings is a direct threat to the tax credits that have recently helped thousands of Floridians buy health insurance.

In the first ruling, a federal appeals court in Washington, D. C., held that the government may not subsidize Obamacare policies unless they were purchased from state-run insurance exchanges. Florida and 35 other states refused to set up those exchanges and sent their citizens to buy on the federal exchange. The D. C. court, following a strict reading of the ACA, said those subsidies were illegal.

University of Miami health policy professor Steven Ullmann believes 800,000 state residents could be in trouble.

"We are the state that has the highest participation of people buying into the federal exchange," he says. "We had nearly a million people buy in. About 20 percent of those individuals did not utilize or need the subsidy but 80 percent did. These are people who would now see the rate of their health insurance effectively go up."

But a same-day ruling from a Virginia appeals court was exactly opposite. Those judges ruled that the obvious intent of the law trumped the nature of the exchanges.

Ullman agrees. "Congress did intend that people have access to insurance to provide comprehensive insurance through the country to move toward universal health care coverage," he says.

If appeals do not reconcile the two court rulings, the cases will got to the U. S.  Supreme Court. A resolution may be nearly a year away. Health experts worry that if the D. C. court prevails, health costs will rise and all but the very sick will drop their policies as the affordable factor drops out of the Affordable Care Act.

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