Washington, DC, United States (4E) – Two federal appeals court on Tuesday issued conflicting rulings on the legality of insurance subsidy under the Affordable Care Act (ACA) adding to the list of controversies hounding the law.
The D.C. Circuit Court of Appeals ruled in the case Halbig v. Burwell that only residents of states that set up their own health insurance marketplaces are entitled to the subsidy. The 4th Circuit Court of Appeals based in Richmond, ruled on the case King v. Burwell that the subsidy covers all states whether they set up their own marketplace or used that of the federal government’s Healthcare.gov.
A three-judge panel in the D.C. Court voted 2-1 for the ruling while all three judges in the other appeals court were unanimous in their ruling. The D.C. court judges interpreted the language of the ACA as not permitting the Internal Revenue Service to distribute tax credits that offset premium costs to enrollees in the federal exchange, meaning that consumers must bear the entire cost of their insurance.
The Richmond court, however, said the intention of the law is to provide subsidy help to everyone enrolled in Obamacare.
The White House praised the ruling of the 4th Circuit Court of Appeals and will ask the D.C. Circuit Court of Appeal’s 11 judges to rule en banc in a bid to overturn the decision. In case the D.C. court overturns the ruling, the plaintiffs plan to appeal to the U.S. Supreme Court.
If it upholds the ruling, an estimated 5 million low- and middle-income Americans may not be eligible to insurance subsidy amounting to about $36 billion. The figure belongs to 36 states that opted to use the federal insurance marketplace Healthcare.gov.