Appeals court throws out ruling that threatened health law subsidies and will re-hear case

  • Article by: MARK SHERMAN , Associated Press
  • Updated: September 4, 2014 - 11:06 AM
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A federal appeals court in Washington threw out a ruling questioned the subsidies to low- and middle-income people under the U.S. health care law. File photo of a consultant using the federal health web site, healthcare.gov.

Photo: Andrew Harrer, Bloomberg

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WASHINGTON — The federal appeals court in Washington threw out a ruling Thursday that called into question the subsidies that help millions of low- and middle-income people afford their premiums under the president's health care law.

The U.S. Circuit Court of Appeals for the District of Columbia granted an Obama administration request to have its full complement of judges re-hear a challenge to regulations that allow health insurance tax credits under the Affordable Care Act for consumers in all 50 states.

The announcement diminishes the prospect of Supreme Court review of the issue in the near term. The initial 2-1 appeals court ruling in Washington came out the same day that a panel of appellate judges in Richmond, Virginia, unanimously sided with the administration on the same issue.

The health law's opponents had hoped that the split rulings would lead the high court to take up the issue soon.

Now, the argument in the federal courthouse just a few blocks from the Supreme Court will take place on December 17.

If the full court comes out in favor of the administration, the prospect of Supreme Court involvement would be greatly reduced. On the other hand, if the full Washington court essentially reinstates the original decision, then the Supreme Court would almost certainly weigh in. Under that scenario, the justices probably would not render a decision until the spring of 2016.

In the first appellate ruling on July 22, two Republican-appointed judges ruled against the administration, with a Democratic appointee dissenting. They said that under the law, financial aid can be provided only in states that have set up their own insurance markets, or exchanges. The unanimous Richmond panel that upheld the law's financing was made up of three Democrats.

The Washington court that will hear the case has seven judges appointed by Democratic presidents, including four by Obama, and four by Republican presidents. Two senior judges on the initial panel, one Democrat and one Republican, also may choose to weigh in, under appeals court rules.

The fight over subsidies is part of a long-running political and legal campaign to overturn Obama's signature domestic legislation by Republicans and other opponents of the law.

In the Washington case, Halbig v. Burwell, a group of small business owners argued that the law authorizes subsidies only for people who buy insurance through markets established by the states — not by the federal government, which runs the markets, or exchanges, in 36 states.

If the challengers succeed, more than half the 8 million Americans who have purchased taxpayer-subsidized private insurance under the law could face hefty increases in their insurance premiums.

For those federal exchange consumers, it would result in an average premium increase of 76 percent. Customers now pay $82 on average on total monthly premiums averaging $346. The federal subsidy of $264 a month makes up the rest of the premium.

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