Health Care Law… A Tale of Two Cities?

By Linda H. Evans,
Senior Associate.


In a 2-1 decision, the appeals court in Washington, DC, called into question the subsidies that help low and middle income people pay their premiums, saying financial aid can be paid only in states that have set up their own insurance markets or exchanges. There are 14 states that run their own exchanges without help from the federal government. Texas is one of 27 states that did not set up an exchange. A few states have set up “partnership” exchanges and could potentially be negatively affected by the ruling too.


However, about 100 miles away in Richmond, Virginia, the 4th Circuit Court of Appeals, in a 3-0 decision, came to the opposite conclusion, siding with the IRS’ ruling that allowed consumers in all 50 states to purchase subsidized coverage.


Currently, individuals and families who earn between 100% and 400% of the federal poverty level are eligible for subsidies. For those who enrolled this year, it includes individuals earning $11,490 to $45,960.


Not surprisingly, the votes fell along party lines. The judges who voted against the financial aid were appointed by Republican presidents, while the judges who voted for the financial aid were appointed by Democrats. The administration has said they will seek a hearing by the full 11-member panel of the DC Circuit, which has seven judges appointed by Democratic presidents. There are also cases waiting in Oklahoma and Indiana. There is a good chance this issue will ultimately wind up before the Supreme Court.


So stay tuned…the final decision has not yet been reached!