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Tag: health care subsidies
D.C. Appeals Court To Review Decision Jeopardizing Health Care Subsidies

D.C. Appeals Court To Review Decision Jeopardizing Health Care Subsidies

By David G. Savage, Tribune Washington Bureau

WASHINGTON — President Barack Obama’s lawyers have won a second chance to stop a lawsuit that has the potential to unravel the national health care law and its system of insurance subsidies.

The full U.S. Court of Appeals for the District of Columbia said Thursday it will reconsider a 2-1 decision by a panel of the court in July that struck down the subsidies for health insurance provided under the Affordable Care Act in 36 states.

These states rely on insurance exchanges run by the federal government. In July, the two judges in the majority, both Republican appointees, said the law as written authorized subsidies for only state-run exchanges. The decision, if allowed to stand, could void insurance subsidies for about 5 million low-income and middle-income Americans.

Thursday’s brief announcement may be crucial in preventing the Supreme Court from taking up the issue this fall. Conservative activists who launched the lawsuit hoped to get it before the Supreme Court as soon as possible.

But justices usually hear cases when different federal appeals courts are split on an issue of federal law. In July, an appeals court in Virginia upheld the Obama administration’s defense of the health care subsidies on the same day the appeals court panel in Washington rejected them.

Thursday’s announcement by the full D.C. Circuit to set aside the July panel ruling will lessen the chances the justices will vote to take up the issue soon.

The appeals court said it will hear arguments Dec. 17, and the administration is expecting the full court to reverse the panel’s decision.

In the past year, Obama added four new judges to the D.C. Circuit Court, giving Democratic appointees a majority for the first time since the 1980s.

The legal dispute turns on a provision of the Affordable Care Act that says tax credits will subsidize insurance purchased on an exchange “established by the state.” Currently, only 14 states operate their own exchanges. The rest rely on exchanges run by federal officials.

The 2-1 decision in July said the provision as written did not authorize subsides in the 36 states.

The administration’s lawyers sharply disputed this interpretation. They said that the law was intended to provide subsidies nationwide and that the law allows for federal exchanges to take the place of a state exchange.

AFP Photo/Karen Bleier

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Obama Awaits Another Court Ruling That Could Deal Blow To Health Law

Obama Awaits Another Court Ruling That Could Deal Blow To Health Law

By David G. Savage, Tribune Washington Bureau

WASHINGTON — President Barack Obama’s health care law could be dealt a severe blow this week if a U.S. appeals court rules that some low- and middle-income residents no longer qualify to receive promised government subsidies to pay for their health insurance.

The case revolves around a legal glitch in the wording of the Affordable Care Act, which as written says that such subsidies may be paid only if the insurance is purchased through an “exchange established by the state.”

That would seem to leave out the 36 states in which the exchanges are operated by the federal government.

A ruling could come as early as Tuesday.

The administration has argued that Congress intended to offer the subsidies nationwide to low-and middle-income people who bought insurance through an exchange, without making a distinction.

Lawyers and congressional staffers who worked on the 2010 law have described the problem as a classic wording glitch in a long and complicated piece of legislation.

In one part of the law, it says that states, which normally regulate insurance, could create exchanges that would help consumers and small businesses shop for coverage. The law also said if a state failed to establish an exchange, the federal government could step in and run one in its place.

A second part of the law described the subsidies that could be offered to low- and middle-income people to cover the cost of the insurance. This part of the law said these subsidies — or tax credits — would be offered for insurance bought on an exchange “established by the state.”

Apparently no one noticed the problem until the law was passed. Then, because of fierce political opposition and the 2010 Republican takeover of the House, supporters of the law could not fix the wording through an amendment. Moreover, the administration did not anticipate most Republican-led states would refuse even to create an insurance exchange for their residents.

The Internal Revenue Service adopted a regulation in 2012 that said individuals who qualify for subsidized insurance that is purchased on a government-run exchange may receive a tax credit, “regardless of whether the exchange is established and operated by a state.”

But the libertarian Competitive Enterprise Institute filed a suit, Halbig vs. Burwell, on behalf of several plaintiffs, contending this regulation is illegal.

They lost in January before a federal judge who decided Congress intended to offer the insurance subsidies to everyone who qualified.

If a panel of the U.S. Circuit Court of Appeals for the District of Columbia rules against Obama — and the tone of oral arguments suggested it might — the administration could ask the full 11-member appeals court to weigh the issue.

In the past year, Obama has added four new judges to the D.C. circuit court, giving Democratic appointees a majority for the first time since the mid-1980s.

AFP Photo/Brendan Smialowski

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