The issue of Obamacare prominent in the 2014 elections….incumbents and challengers have, without some exceptions, listed it as one of their top priorities….the Dems defend it pretty tepidly- while most of the Republicans aim to amend or repeal….stay tuned….rsk
A pair of federal Appeals Court rulings have sown further confusion regarding ObamaCare, even as they illuminate stark differences in ideologically-inspired interpretations of the law. First, a three-judge panel from the D.C. Circuit Court of Appeals ruled 2-1 that Americans are not entitled to subsidies for their healthcare premiums if they live in a state where the federal government set up a healthcare exchange. Shortly thereafter, a three-judge panel from U.S. Court of Appeals for the Fourth Circuit in Richmond, VA unanimously determined exactly the opposite. The survival of ObamaCare may depend on which decision ultimately prevails.
Both rulings hinge on the wording of the statute. In order to entice the states to set up their own marketplaces, the law used clear language noting that premiums subsidies for low- and middle-income purchasers of health insurance would only be available on exchanges “established by the State.” Democrats and the Obama administration erroneously believed that the threat of withholding subsidies would force the states’ hands. When it didn’t, and only 14 states and the District of Columbia set up their own exchanges, the Obama administration employed an IRS rule to stretch the meaning of the law to include every state in the country, contending that Congress “meant” the law to work that way.
In Halbig v. Burwell (previously known as Halbig v. Sebelius) the D.C. Circuit Court of Appeals rejected that argument. “Section 36B plainly makes subsidies available in the Exchanges established by states,” wrote Senior Circuit Judge Raymond Randolph in his majority opinion, where he was joined by Judge Thomas Griffith. “We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.” Dissenting Judge Harry Edwards, who characterized the case as a “not-so-veiled attempt to gut” the healthcare bill, wrote that the judgment of the majority “portends disastrous consequences.”
If the ruling stands its effects would indeed be dramatic. The federal government’s HealthCare.gov website serves residents of the 36 states that refused to set up their own exchanges. In those states 86 percent, or approximately 4.7 million Americans, currently receive subsidies to offset the cost of their health insurance. Without those subsidies many enrollees will no longer be able to afford such coverage. And since those policies would no longer be “affordable” as defined by the healthcare bill, those affected will no longer be required to have health insurance this year, or pay a fine for lack of coverage next year.
The resultant exodus would more than likely produce a cascading effect of raising premiums for non-subsidized enrollees who remain on those plans. As a group those who remain are also likely be less healthy, which in turn could drive up premium costs even further.