Dueling rulings came down Tuesday in two different federal courts on whether the tax subsidies that people in Illinois and 35 other states were supposed to use to buy health insurance through President Barack Obama’s health care law are illegal.
In a 2-1 decision, the U.S. Court of Appeals for the District of Columbia delivered a serious setback to the Affordable Care Act, arguing that the law authorizes subsidies only for people who buy insurance through markets established by the states — not by the federal government.
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In a 2-1 decision, the U.S. Court of Appeals for the District of Columbia delivered a serious setback to the Affordable Care Act, arguing that the law authorizes subsidies only for people who buy insurance through markets established by the states — not by the federal government.
That would derail billions of dollars in tax subsidies for many low- and middle-income people who bought policies in the 36 states served by the federal government.
But two hours later, three 4th U.S. Circuit Court judges in Virginia unanimously ruled in a different case that Congress clearly intended to make those same disputed subsidies as widely available as possible to make insurance more affordable. And therefore, all states should be eligible for tax-credits.
White House spokesman Josh Earnest said the decision would have “no practical impact” on tax credits as the case works its way through further appeals.
“The bottom line for now is that nothing has changed and the subsidies created under the law to help people cover the cost of their health remain in effect,” Jennifer Koehler, executive director of Get Covered Illinois, said in a statement.
The Obama administration will seek a hearing by the full Washington appeals court. The full court has seven judges appointed by Democratic presidents, including four appointed by Obama.
The issue, which could make it to the U.S. Supreme Court, is crucial to the success of the health law because most states have been unable or unwilling to set up their own exchanges. The inaction stems in many instances from opposition by Republican governors to the Affordable Care Act.
Without tax subsidies, it is likely that many more people will go without insurance.
About 168,000 Illinois residents qualified for financial subsidies. Nationally, more than 4.5 million people were found eligible for subsidized insurance.
State legislators have discussed the idea of creating an Illinois-run exchange. But no consensus has been reached.
The state and key legislators say they are monitoring court cases as they proceed.
So are people like Dwight Breeden, a 56-year-old self-employed consultant from Glen Ellyn, who say they are anxiously waiting to see if they will be able to keep the tax credits they received from the government.
Breeden got a $10,354 health insurance plan for his family of four on the federal marketplace with a tax credit of $500 a month after his previous plan was canceled last October because the plan didn’t cover all of the benefits required by the ACA.
Though the new plan he got from ‘Obamacare’ has a higher deductible than he’d like, Breeden said he is happy with the plan he has. Loss of the tax credit means “I’d probably have to switch plans to a lesser plan that costs less, and obviously I would get less for it,” Breeden said.
“These things worry me, if they come to pass,” he said.
Contributing: Associated Press
