Federal appeals court rules that subsidies are illegal
Health care is still a problematic issue in the U.S. Earlier this week, the D.C. Circuit Court of Appeals ruled that the Affordable Care Act does not grant the Internal Revenue Service the authority to distribute subsidies through state-based insurance exchanges. This ruling implies that the subsidies provided to those receiving coverage through these exchanges are illegal. Merely hours after the court had issued its ruling, the Fourth Circuit Court of Appeals ruled that these subsidies were actually legal.
Contradictory rulings place the Affordable Care Act in turbulent political waters
The contradictory rulings from federal courts have brought the Affordable Care Act back into the limelight. The issue may set the federal law on track to being reviewed, again, by the U.S. Supreme Court. The Supreme Court had upheld the law as constitutional, allowing form reform to take hold throughout the country, but the issue concerning subsidies may spur changes in the law that are difficult to predict.
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Federal officials suspect that ruling on subsidies will be overturned by appeals
Federal officials noted that the first ruling regarding the subsidies is likely to be overturned through appeals. If not, however, some 5 million people receiving these subsidies could lose their financial aid. This would mean that they would have to bear the full burden of their health insurance coverage. A ruling against these subsidies could cause significant problems for the exchanges throughout the country. Exchanges managed by the federal government could face significant issues in terms of logistics and ensuring that people have access to insurance coverage.
Ruling against subsidies could cause many people to lose their coverage
The subsidies were meant to provide those without the means to pay for insurance coverage to receive it. In many cases, the subsidies have been the most attractive aspect of state insurance exchanges, encouraging consumers to use these exchanges to purchase coverage. Without these subsidies, many people may not be able to afford coverage, but will still have to have some sort of health insurance policy in effect in order to comply with federal law.