Obama Don't Care: Court Potentially Derails Health Care Subsidies for Low- and Middle-Income People, WH Vows Appeal

(AP Photo/J. Scott Applewhite)WASHINGTON (AP) — A federal appeals court has delivered a serious setback to President Barack Obama's health care law, potentially derailing billions of dollars in subsidies for many low- and middle-income people who bought policies.

In a case before the U.S. Court of Appeals for the District of Columbia Circuit, a group of small business owners argued that the law authorizes subsidies only for people who buy insurance on exchanges established by the states.

A divided court agreed, in a 2-1 decision that could mean premium increases for more than half the 8 million Americans who have purchased taxpayer-subsidized coverage under the law. The ruling affects consumers who bought coverage in the 36 states served by the federal insurance marketplace, or exchange.

The majority opinion concluded that the law, as written, "unambiguously" restricts subsides to consumers in exchanges established by a state. That would invalidate an Internal Revenue Service regulation that tried to sort out confusing wording in the law by concluding that Congress intended for consumers in all 50 states to have subsidized coverage.

The administration is expected to appeal the ruling.

The White House says health subsidies under the Affordable Care Act will continue to flow for the time being despite the major setback delivered by a federal appeals court.

The ruling potentially derails billions of dollars in subsidies for many low- and middle-income people who bought policies. But White House spokesman Josh Earnest says while the case works its way through the courts, it has "no practical impact" on tax credits. He said the White House is confident in Justice's legal case.

Earnest says there's mixed legal opinions on whether people who buy insurance through state-based markets can get subsidies.

The ruling affects consumers in the 36 states served by the federal marketplace.

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