If you live in New York, have a low income, and need health insurance, the federal government will help you pay for it. If you live in Pennsylvania, or one of 35 other states, it might not.
That’s the upshot of today’s ruling on Obamacare by the federal Court of Appeals for the District of Columbia. Based on a strict reading of the law, the court held that you can only receive a subsidy to purchase coverage if you live in a state that set up an insurance exchange on its own. If your state uses the federal website, healthcare.gov, you are out of luck. (To read the opinion, click here.)
Does that make any sense? The court said it was only following the wording of the law, which says that subsidies are available for policies purchased on an exchange “established by the State.” New York established an exchange. Pennsylvania did not.
But the ruling makes no sense in light of Obamacare’s overall purpose. Subsidies are a crucial part of making health insurance widely available. Why would Congress bestow this benefit on Americans who live in some states but not in others?
Supporters of the law say the issue is one of imprecise drafting, not of unclear meaning. When it enacted the Affordable Care Act, Congress expected that most states would create exchanges on their own. In those few states that did not, the federal government would step in to act on their behalf. The intent to provide subsidies to all low-income Americans was clear, even if the wording was not, and Congressional intent is what should guide courts.
And the reference to state-established exchanges makes sense as an attempt to distinguish between exchanges that are created by the government, in one form or another, and those created privately.
The ruling will face at least two rounds of appeals. It was issued by a panel composed of three out of the 11 judges on the full Court of Appeals for the District of Columbia. The administration is expected to request review of the decision by the entire court (known as en banc review). After that, it is likely headed to the Supreme Court.
In the meantime, a federal appeals court in Virginia issued an opposite ruling just two hours after the D.C. decision was announced, upholding the subsidies in all states.
These conflicting rulings leave the legal landscape for Obamacare even more convoluted than ever. It may take years to finally resolve.
Whatever the ultimate outcome, millions of Americans remain in need of health insurance that they could not get or could not afford before the law went into effect. It would be unfortunate if they became pawns in the ongoing legal and political battles.
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