Appeals court rules in favor of Obamacare subsidies on same day other court rejects them

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[Adds breaking news update 12:45 p.m.]

WASHINGTON, D.C. — In a second decision on the same issue, a federal appeals court in Richmond on Tuesday ruled in favor of government subsidies for people signing up for Obamacare health coverage. That differed from a decision earlier in the day by a federal appeals court in the District of Columbia that went against the administration.

[Original story at 12:20 p.m.]

The battle over Obamacare took a dramatic turn Tuesday with a federal appeals court rejecting subsidies paid by the government to millions of new enrollees.

In a 2-1 ruling, a three-judge panel found the federal money that helped people afford health insurance only could go to those who signed up through exchanges run by states.

That’s what the law specified, the ruling said, meaning those who signed up through the federal government aren’t eligible for the subsidies that helped them afford coverage.

Only 16 states and the District of Columbia set up their own exchanges, meaning that the 4.7 million who signed up for subsidized health coverage overall under Obamacare through could be affected.

President Barack Obama’s administration will appeal the decision to the full D.C. Circuit Court of Appeals, the Justice Department announced, and the case will likely reach the Supreme Court.

For now, the law remains unchanged and the subsidized policies are unaffected until the legal case plays out, White House spokesman Josh Earnest told reporters.

He cited three other cases on the same issue also argued in federal courts, noting two had been dismissed and that Tuesday’s ruling was the first appellate decision against the government’s position.

“For those keeping score, we’re still ahead 2-1 here,” Earnest said.

However, the potential long-term impact is huge.

If the final result backs the appeals decision, the result would wipe out subsidies and undermine a key component of Obamacare’s requirement that all Americans obtain health coverage.

The easiest fix — changing the law to specify that it allows subsidies for coverage purchased through the federal government as well as state exchanges — would mean reopening the debate over the 2010 Affordable Care Act that passed with zero Republican support.

Republicans now control the House and are expected to make gains in the November election, perhaps also gaining a majority in the Senate.

That means Obama and Democrats have no chance of getting Congress to approve needed changes in the law despised by the political right.

GOP Sen. Ted Cruz of Texas, one of the leading crusaders against the health care law, called Tuesday’s ruling “a repudiation of Obamacare and all the lawlessness that has come with it.”

He argued the federal subsidies, such as tax credits to people who didn’t sign up on state exchanges, amounted to assuming funding powers the Constitution granted Congress.

Earnest, however, said the law clearly intended to provide subsidies for all who enrolled under Obamacare, and that the administration was confident in its legal position.


  • Hobbes

    The court read what is in the law (unlike those who passed it). The court is upholding the law. You will read in the media that the court has “struck down” ACA, but that is propaganda. The law states that the IRS is not permitted to give tax subsidies in states that had ACA exchanges “established by the State.” Now Nancy Pelosi knows what’s in the law she passed in the middle of the night. Challenges will come, but that’s how the law reads.

    • whatamimissing

      Hobbes, you say: ‘The law states that the IRS is not permitted to give tax subsidies in states that had ACA exchanges “established by the State.” ‘, but this report says: “…those cost-sharing subsidies can be used ONLY through state-run health exchanges, not the federal exchanges.”. So aren’t they saying the opposite of what you say the law says?

      • Hobbes

        Thanks. Correction: “Except” in states that set-up ACA exchanges. Now, this causes problems in MD and OR which could never get their state exchanges to run correctly, so they leaned on the federal exchange. The law made this provision while allowing states to opt-out of creating a state exchange. So the law provided for the one which then necessarily disallowed the other. That’s what’s in it.

  • American Hero

    About time someone stuck to the rules and putting pressure on our BS President and his lieing and deceitful ways! He passed all of this without approval by all parties and hopefully now he is truly the worst President in all of US History! FIrst and last colored I can guarantee it.

    • whatamimissing

      Um, Erfayefarlow, the last sentence of his comment reads like this: “First and last colored I can guarantee it”. If you don’t see what’s racist about that then I’m going to have to assume that you are also racist.

  • whatamimissing

    Ah, okay. So the powers that be in the states that opted out were well aware of that and and purposefully screwed over their own people just out of their selfish desire to see the ACA (Obama) fail.

      • Hobbes

        Not only did they pass it without debate and without posting it online as the President vowed he would do with all laws when he ran… they have since decided to defy their own law. The law contains specific dates for implementation. The president, on his own, has decided he doesn’t give a rip what the law says, he’s going to change the dates as he sees fit. That’s not how laws work. The legislature passes laws and the executive branch enforces them. In this case, a Democratic legislature passed a law the Democratic president demanded and signed… and now he doesn’t want to follow the law. Finally, if you read the decision, the judges reluctantly ruled against the IRS, but they had to rule that way because the legislature wrote the law that way. Go complain to Pelosi, Reid and Obama.

    • Hobbes

      It’s the law. It’s how they wrote it. They then set-up a federal exchange. They have no one to blame but themselves. The states that opted out neither wrote the law nor set up the federal exchanges. So you’re arguing that those who followed the options in the law were “well aware” of it, but not those who wrote it and passed it… all while claiming that it had to be passed immediately without debate… were not aware of what was in the law they passed?

      • whatamimissing

        Nope, also, blaming the idiots who wrote it and passed it with that obvious flaw in it. The leaders in the states who took advantage of it, though, are worse than idiots… evil, I’d say.

      • Hobbes

        They set up a gigantic federal exchange under a law that states that the IRS is not permitted to give tax subsidies except in states that had an ACA exchange “established by the State”… and it’s the fault of the TEA Party? Good luck with that. And what do you do with MD and OR which tried to set up exchanges under Leftist state governments, but then had to go to the federal exchange. Is that some sort of evil plan? Or are you arguing that conservative governors and legislatures are smarter than leftist ones?

      • whatamimissing

        I don’t know what happened in MD or OR, but I doubt it was “some sort of evil plan” if they actually tried to set up a state exchange. As I said, I don’t know what happened to make them have to go to the federal exchange so I can’t comment on that further. And, God, no, I’m not ‘arguing that conservative governors and legislatures are smarter than leftist ones’. Just smart enough to be scary is more like it.

      • Hobbes

        That’s an odd defense. The Democrats introduced the bill with no GOP sponsors and passed it with no GOP votes. So they’re off the hook since they all didn’t write it?

    • JT

      Yep–those states (mostly red, Tea Party controlled) that did not expand Medicaid will suffer because of this, and the leaders of those states are gloating about it! So funny–they are touting the lack of healthcare for their constituents as a “win!” Guess it really doesn’t matter anyway–most of the constituents in those states A. Don’t understand that their state leaders, NOT the federal government, have done them a disservice, and B. Are so anti-science anyway, they probably choose to pray away their cancer rather than have a physician treat them. So this might actually work to the civilized world’s benefit…

      • Hobbes

        Please give us an example of an “anti-Science” position you reference. Tell us, Mr. Science, have you ever had an MRI? And please post your address. I have some medical bills I’d like to send to you since you’re keen on people not being responsible for their own bills. You’ll pay them, correct?

      • j r nance (@rnance1950)

        What type of Dis-Service has the states did anyone as far as Medicaid is concerned, the program is strictly For low income families & they can still be eligible for Medicaid & Nobody is forcing anyone NOT to apply for Medicaid in any state whether the state elected to expand Medicaid or not & if you know of anyone that has applied for Medicaid & didn’t receive it if they are a Low Income Family let us know because I doubt if you know anyone & by the way if you or anybody else qualifies for Welfare you automatically are eligible for Medicaid no Matter what state you apply in so I don’t know what you’re talking about when you say the States are doing their citizens a dis-service, the bottom line is ANYBODY CAN APPLY FOR MEDICAID IF YOU’RE A LOW INCOME PERSON OR FAMILY, nothing’s changed & basically the only reason most states did not Expand Medicaid is because after several years the Feds would start dropping the amount of money they give to the States for Medicaid plus Medicaid is a State funded program & regulated by the states, not Federal except the Feds do give them Grant money assigned to Medicaid but the states have to pay for the bulk of the cost so when the Feds start dropping their amount of money to the states for the program YOUR TAXES will go UP to pay for the program & you might not have a problem with that but I do…..

      • JT

        Where do you want me to start, Hobbes? 1. Global Climate Change is not real, 2. The earth is only 6,000 years old, 3. Homosexuality can be overcome through prayer, 4. Women who are “legitimately raped” can’t get pregnant…want me to go on? We could be here all day…

  • looky here !

    Did everybody forget who really started this whole health care fiasco ? What was it called before Obamacare ? Which President tryed to pass it but could not get to the floor ? what presidents wife began the push for this same mess 12 years ago ? Facts are a pain hey !!

  • Chucky

    What was it she said… “you have to pass the bill to know what is in it”. LOLROF Be careful what you ask for lady, you might get it. :)

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