Affordable Care Act (ACA) Legal Challenge

Posted by Lee Reams Sr. on

The U.S. District Court of Appeals in the DC Circuit is currently hearing Halbig vs Burwell and a decision is expected soon.  

This case challenges the medical insurance subsidies (Premium Assistance Credits) provided to low-income families under ACA.

ACA as written only provided these subsidies to individuals who enrolled in insurance exchanges established by a state.  Thirty-four states opted not to establish exchanges requiring the residents of those state to seek coverage from the Federal insurance exchange.

The administration attempted to resolve this problem by allowing subsidies to be paid through the federal exchange even though the literal translation of the law does not allow it.  The administration argues that reference to a “state” in the law also includes the federal government.  

A district court judge upheld that interpretation allowing the subsidies to continue. If the D.C. Circuit Court rules against the administration the residents of the thirty-four states without an exchange would no longer qualify subsidies, substantially increasing the cost of their insurance and probably lead to a mass exit from program. This no doubt would lead the administration to appeal to the Supreme Court.

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