Newspaper article International New York Times

Health Law Is Clouded by Rulings on Insurance Subsidies

Newspaper article International New York Times

Health Law Is Clouded by Rulings on Insurance Subsidies

Article excerpt

One appeals court panel ruled that the United States could not subsidize coverage bought via the federal insurance exchange. Another said the opposite.

Two federal appeals court panels have issued conflicting rulings on whether the government can subsidize health insurance premiums for millions of Americans, raising yet more questions about the future of the health care law four years after it was signed by President Obama.

The rulings, issued on Tuesday, will apparently have no immediate impact on consumers. But they could inject uncertainty, confusion and turmoil into health insurance markets as the Obama administration firms up plans for another open enrollment season starting in November.

By a vote of 2 to 1, a panel of the United States Court of Appeals for the District of Columbia Circuit struck down an Internal Revenue Service regulation that authorizes the payment of premium subsidies in states that rely on the federal insurance exchange.

If it stands, the ruling could cut off financial assistance for more than 4.5 million people who were found eligible for subsidized insurance in the federal exchange, or marketplace. It could also undercut enforcement of the requirement for most Americans to have insurance and the requirement for larger employers to offer it to their full-time employees.

The Justice Department said the government would continue paying subsidies to insurance companies on behalf of consumers in the 36 states that use the federal exchange, pending further review of the issue by federal courts.

Critics of the law, who said the District of Columbia Circuit ruling vindicated their opposition to it, did not have much time to celebrate. Within hours, a unanimous three-judge panel of the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., issued a ruling that came to the opposite conclusion.

The Fourth Circuit panel upheld the subsidies, saying the I.R.S. rule was "a permissible exercise of the agency's discretion." The language of the Affordable Care Act on this point is "ambiguous and subject to multiple interpretations," the panel said, so it gave deference to the tax agency.

Subsidies, in the form of tax credits, are a major element of the health care law. …

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