You may be aware that there’s been some Obamacare news today. At issue is some imprecise language in the law as passed. You see, the Affordable Care Act set up the idea of exchanges, or marketplaces where a consumer could compare and buy health insurance. It was expected that each state would run their own exchange, but if a state couldn’t or wouldn’t, then the federal government would step in an run an exchange.
Another part of the law set up a system of subsidies, so that if a customer couldn’t afford health insurance, then the federal government would assist financially.
Weirdly, though, and clearly accidentally, the statute says that subsidies may be provided through exchanges “established by the state.” So, technically, this would mean that the federal government could not offer subsidies for people who are purchasing through the federal exchange.
So, this morning, a panel on the D.C. appeals court ruled that the IRS has been giving subsidies unlawfully, and that the federal exchange could not offer subsidies for health insurance. (By the way, this ruling did not “throw away Obamacare” or anything like that.) Of course, Congress could fix this typo in about ten seconds if they wanted, but of course they don’t want to do that.
Now, that ruling was out for about ten minutes before the 4th Circuit Court of Appeals in Richmond made the opposite ruling, saying basically, that they believed that Congress intended for the federal government to offer subsidies on the federally-run exchanges.
What happens now? Well, it looks as though the administration will appeal the First Circuit panel’s ruling to the full First Circuit, which looks more likely based on its makeup to follow the 4th Circuit’s reasoning. If they agree, then the subject is probably settled. If they disagree, look for it to be settled by the Supreme Court (but not otherwise, because the Supreme Court doesn’t tend to take cases that the Circuit Courts agree on).