Federal appeals courts split on health care subsidies

Federal appeals courts split on health care subsidies

[JURIST] Two separate federal appeals court reached opposite conclusions Tuesday on subsidies for individuals who sign up for health insurance through the federal government’s marketplace. The US Court of Appeals for the District of Columbia Circuit [official website] ruled [opinion, PDF] that such subsidies are only available through state-run exchanges, currently operating in only 14 states and the District of Columbia. That ruling reversed a lower court decision [JURIST report] from January. In contrast, the US Court of Appeals for the Fourth Circuit [official website] deferred [opinion, PDF] to the Internal Revenue Service (IRS) [official website], ruling that the subsidies are “a permissible exercise of the agency’s discretion.” The Obama administration has pledged to seek en banc review [WP report] of the DC Circuit’s ruling.

Tuesday’s rulings are the latest in a series of legal challenges to the the Patient Protection and Affordable Care Act [text]. Last month the US Supreme Court [official website] ruled [JURIST report] in Burwell v. Hobby Lobby [SCOTUSblog backgrounder] that closely held for-profit corporations can deny coverage of contraception costs because of their religious beliefs. In January Chief Justice John Roberts refused [JURIST report] to grant a temporary injunction blocking the Obama administration from enforcing the PPACA, denying physician groups’ plea arguing the entire law is unconstitutional due to the method of its passing. Earlier that month US Senator Ron Johnson (R-WI) [official website] filed a lawsuit against the US Office of Personnel Management (OPM) [official website] in the US District Court for the Eastern District of Wisconsin [official website] attempting to block the federal government from paying a portion of the PPACA health care coverage for members of Congress and their staffs. That suit was dismissed [Reuters report] earlier this week.