Federal appeals courts issue conflicting rulings over subsidies for healthcare exchanges

[JURIST] Two federal appeals courts in the US issued conflicting rulings within hours of one another on Tuesday, as the federal court system continues to grapple with the legal ramifications of the Patient Protection and Affordable Care Act (PPACA) [tex, PDF]. The most recent legal debate with the PPACA surrounds the issue of whether subsidies [WP report] may be awarded by the federal government in states that elect not to set up their own health insurance exchange. In the first opinion, the US Court of Appeals for the DC Circuit [official website] ruled [opinion, PDF] subsidies that help individuals purchase insurance through the federal exchanges are illegal. The case, Halbig v. Burwell, reviewed a 2012 decision by the Internal Revenue Service (IRS) [official website] to allow the subsidies. Supporters of the 2-1 ruling argue the IRS exceeded its authority [WSJ report] in issuing the rule. Hours later, the US Court of Appeals for the Fourth Circuit [official website] upheld the subsidies [opinion, PDF] in a unanimous decision in the case King v. Burwell. According to the Washington Post, approximately 5.4 million people signed up for coverage on the federal exchange as of this spring, and about 87 percent of them received a subsidy. Tuesday's rulings will have no immediate impact [NYT report] on consumers, but the future of the PPACA [CA Healthline report] will likely fuel ongoing litigation, and a ruling on the issue of federal subsidies may reach the US Supreme Court following Tuesday's conflicting rulings.

Comprehensive health care reform [JURIST backgrounder] was passed by Congress in March 2010 after over a year of debate, and legal challenges surrounding the provisions of the PPACA have reinvigorated legal debate in 2014. The US Supreme Court [official website] ruled [JURIST report] last month in Burwell v. Hobby Lobby [SCOTUSblog backgrounder] that closely held corporations can deny contraceptive coverage to their employees for religious reasons. Two weeks after the Hobby Lobby decision, US Senators Patty Murray (D-WA) and Mark Udall (D-CO) introduced a bill [JURIST report] to restore full contraception coverage for employees of closely held corporations.

 

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