A federal appeals court ruled today that due to the wording of the Affordable Care Act, Obamacare subsidies are unauthorized in states that haven't set up their own insurance exchanges. In those states, which are mostly Republican-controlled, the IRS had been granting subsidies to customers who purchased insurance plans on the federal exchange.
The ruling, in the case of Halbig vs. Burwell, held that the language of the Affordable Care Act only mentioned state-run exchanges—not the federal one—when it authorized subsidies. Without those subsidies, the cost of Obamacare will be sharply, or prohibitively, higher for people relying on the federal exchange.
The case was decided by three judges on the D.C. circuit court—two Republican appointees voted to throw out the subsidies, with a Democratic appointee dissenting. The federal government will now ask the entire D.C. court—11 judges—to review the decision. So subsidies will likely be in place until at least the fall.
If they succeed, the plaintiffs in this case (three employers and four "taxpayers") will make Obamacare largely unworkable in the states involved. The law is already struggling in GOP-controlled states where legislatures have decided not to expand Medicaid, blocking a key coverage option for poor residents.
The Halbig decision, if upheld, would further reduce health coverage in red states. Eighty-seven percent of people who enrolled in Obamacare through Healthcare.gov, rather than a state exchange, are getting subsidies. The Washington Post provides this example:
The subsidies are in many cases sizeable, sharply reducing the cost of coverage. In Wyoming, for example, the average consumer who bought a mid-grade plan on the federal marketplace is receiving a subsidy of around $444 per month, cutting the monthly payments to $99, according to federal figures.
Conservative Twitter is already gleefully tee-heeing about the decision and the fact that the health care law didn't explicitly say that every Obamacare enrollee was entitled to subsidies, regardless of how they signed up. But gloating about the fact that most people in red states will have to pay more for health insurance is strange choice of tactics, politically. Ultimately, it means gloating about taking people's benefits away.
[Image via AP]