Healthcare Business News

Challengers of ACA subsidies seek fast appeal

By Joe Carlson
Posted: January 19, 2014 - 12:01 am ET

Opponents of the Patient Protection and Affordable Care Act this week will seek a lightning-fast appeal in their legal challenge to a key provision allowing millions of Americans to get federal premium tax credits to help them buy health coverage through the federal insurance exchange.

The plaintiffs argue that the case is especially time-sensitive because billions of dollars a month in tax subsidies are being handed out even though the law doesn't allow for it.

The dispute involves the question of whether the language of the law allows tax credits for people who buy coverage through the federal exchange rather than through “state-established” exchanges. The plaintiffs in Halbig v. Sebelius say the tax credits are available only to low- and moderate-income Americans who buy insurance through exchanges run by states.

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Thirty-six states decided not to run their own exchanges, forcing the federal government to run them alone or in partnership with the state. The text of the law says the subsidies are only available “through an exchange established by the state.” But the IRS issued rules saying the subsidies would also go to federal exchange customers.

On Jan. 15, U.S. District Judge Paul Friedman in Washington ruled in Halbig that Congress clearly intended for the tax credits to be available in all states, regardless of whether the federal government or the state government runs the exchange. The larger context of the law makes clear Congress' goal was to expand health insurance to as many Americans as possible, he said.

Friedman's ruling was appealed to the U.S. Circuit Court of Appeals in Washington the same day Friedman announced it. The plaintiffs also moved for an expedited case schedule, and they have until Thursday to explain why.

Several lawsuits involving the same issue are pending around the country. Experts say it's possible that the U.S. Supreme Court ultimately will decide the issue.

Follow Joe Carlson on Twitter: @MHJCarlson

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