Practice Economics
The Obama administration is getting a second chance to show that providing tax subsidies through the Affordable Care Act’s federally run insurance marketplace is legal.
On Sept. 4, the District of Columbia Circuit of the U.S. Court of Appeals granted the government’s petition for a rehearing en banc in Halbig v. Burwell. The rehearing will be heard by all 17 judges on the court and the previous ruling made by a three-judge panel of the court has been vacated.
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Hope remains for those supporting the legality of tax subsidies handed down by Obamacare.
The earlier ruling, issued on July 22, was 2-1 in favor of the plaintiffs and, had it been upheld, had the potential to strip insurance subsidies from about 5 million Americans who had purchased health plans through the federally run marketplace.
Also on July 22, the 4th Circuit of the U.S. Court of Appeals in Virginia handed down a conflicting ruling, siding unanimously with the government in a similar case, King v. Burwell. The King plaintiffs have already appealed to the Supreme Court, but the high court has not indicated whether it will consider the case.
At issue is whether the federal government has the authority to issue tax subsidies to consumers from 36 states who purchase insurance on the federal marketplace since the ACA specifies only that subsidies would be available on the state-run marketplaces. The plaintiffs have argued that the administration is overstepping its authority by also offering subsidies on the federal marketplace. But administration officials maintain that Congress intended the subsidies to be offered to all eligible consumers regardless of who operates the marketplace.
The D.C. appellate court will hear oral arguments in Halbig v. Burwell on Dec. 17.
mschneider@frontlinemedcom.com
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