Two US judicial panels on Tuesday injected new uncertainty into the future of US President Barack Obama’s healthcare law, with conflicting rulings over whether the federal government can subsidize health insurance for millions of Americans.
The appeals court rulings, handed down by three-judge panels in Washington and Richmond, Virginia, augured a possible rematch before the US Supreme Court, which in June 2012 narrowly upheld the Democratic president’s 2010 healthcare overhaul.
The twin rulings fell in line with partisan disagreements over healthcare reform, with two judges appointed by Republican presidents deciding against the administration in the District of Columbia and three judges appointed by Democrats ruling in favor in Virginia.
The rulings also reignited the debate over Obamacare on Capitol Hill and on the campaign trail to November congressional elections. Republican opponents of the law welcomed the Washington decision as a further step toward dismantling Obama’s signature domestic policy.
The cases deal with the government’s ability to offer premium tax credits to people who purchase private coverage through the federal insurance marketplace that serves the majority of the 8 million consumers who signed up for this year.
The US Court of Appeals for the District of Columbia Circuit ruled in a 2-1 decision that the language in the Affordable Care Act dealing with subsidies shows they should only be provided to consumers who purchase benefits on exchanges run by individual states.
Most states, including Florida and Texas, which have some of the largest uninsured populations, opted to leave the task of operating a marketplace to the federal government.
However, plaintiffs in the DC Circuit case, known as Halbig v. Burwell, said that US Congress did not intend to provide subsidies through federally operated marketplaces. The plaintiffs were identified as a group of individuals and employers from states that did not establish their own marketplaces.
The DC Circuit judges suspended their ruling pending an appeal by the administration. Administration officials said they would appeal to the full circuit court, a process that could take up to six months, and stressed the ruling would have no impact on consumers receiving monthly subsidies now.
Hours later, a three-judge panel of the 4th US Circuit Court of Appeals in Virginia ruled unanimously to uphold the same provision in the case of King v. Burwell, saying the wording of the law was too ambiguous to restrict the availability of federal funds.
The appearance of a split between separate circuit courts over the question of Obamacare subsidies could increase the chance of US Supreme Court intervention.
However, legal experts and some Republicans on Capitol Hill said the full DC Circuit court, dominated by appointees of Democratic presidents, was likely to overturn its panel’s ruling or at least revisit it.
The Supreme Court upheld the Obamacare law on constitutional grounds in 2012, but allowed states to opt out of a major provision involving Medicaid coverage. Last month, the high court’s conservative majority ruled again on the law, saying closely held for-profit corporations could object to Obamacare’s contraception provision on religious grounds.
“Today’s ruling is also further proof that President Obama’s healthcare law is completely unworkable. It cannot be fixed,” US House Speaker John Boehner said in a statement.
Obamacare advocates welcomed the Virginia ruling, which US House Minority Leader Nancy Pelosi said “affirms the intent of the Affordable Care Act: to make quality, affordable health insurance available to every American in every state.”
Outside the political sphere, stock market reaction to the rulings was muted for health insurers like WellPoint Inc and Aetna Inc, which sell plans on many Obamacare exchanges.
Industry officials predicted that a final decision would take “months or longer” to sort out, with no immediate impact expected on their business.
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