A top federal appeals court dealt a crippling blow the Affordable Care Act Tuesday. The three-judge panel in the District of Columbia ruled that the billions of dollars of federal government subsidies given to the states to be used for the HealthCare.gov exchanges are illegal.
The reasoning of Halbig v. Burwell: It is legal to buy insurance in an Obamacare exchange run by an individual state or the District of Columbia — not on the federally run exchange HealthCare.gov, CNBC reports.
Obamacare “hinges crucially on the subsidies. The primary purpose of the law was to extend affordable health coverage to millions of Americans; the two main ways the law achieves this is through the Medicaid expansion and through subsidized coverage on the insurance exchanges,” Vox explains.
The Obama Administration has insisted from the outset that the Affordable Care Act will be, well, affordable, and the federal subsidies were a key cog in the endeavor.
It’s likely that should these subsidies be withdrawn, many who receive them will no longer be covered.
A Robert Wood Johnson Foundation analysis finds that this decision “could affect over 7.3 million people expected to receive federal subsidies in 2016.”
“[HealthCare.gov] serves residents of the 36 states that did not create their own health insurance marketplace. About 4.7 million people, or 86 percent of all HealthCare.gov enrollees, qualified for a subsidy to offset the cost of their coverage this year because they had low or moderate incomes,” CNBC explains.
The real sticking point is that the Obamacare legal language does not explicitly say whether subsidies can be given to those who buy from Healthcare.gov, but it is explicit that subsidies can be given to the state exchanges.
“Today’s decision is yet another blow to the President’s disastrous health care law,” Rep. Diane Black (R-Tenn.) said in a statement. “If this decision holds, it means that the Obama Administration has been doling out billions of dollars in taxpayer subsidies without the proper statutory authority. And to make matters worse, this means that the President has been misrepresenting the true costs of health coverage to millions of American families.”
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