The Fourth Circuit Court of Appeals, in Richmond, Virginia, ruled today that the IRS has the power to grant subsidies to people who are enrolled in Obamacare through the federal health insurance exchange. This is the opposite of what the D.C. Circuit Court of Appeals had ruled just hours before. Neither of these decisions is the final say on the issue.
Three judges on the Fourth Circuit—two Democratic appointees and one Republican appointee—unanimously decided to defer to the IRS, which had issued a rule that allows the payment of subsidies in all states, whether those states had set up their own insurance exchanges or not. Judge Roger L. Gregory wrote in his opinion, "we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS's determination, however, we uphold the rule as a permissible exercise of the agency's discretion."
Gregory noted that the IRS rule advances the broad goals of the Affordable Care Act: "to increase the number of Americans covered by health insurance and decrease the cost of health care."
In a concurring opinion, Senior Judge Andre Davis explained that reading the law and determining that only those enrolled in state exchanges should get subsidies is "not literal; it's cramped. ... [the] reading bespeaks a deeply flawed effort to squeeze the proverbial elephant into the proverbial mousehole."
Earlier today, the D.C. district court had ruled, 2-1, that the same interpretation Davis called "cramped" was the "plain" reading of the text, and that the law had only subsidized the purchase of insurance on exchanges directly run by the states.
[Image via AP]