A federal appeals court ruling released this morning could have a devastating effect on Obamacare, as it
declared subsidies given to those insured by healthcare.gov illegal. From
CNBC:
The 2-1 ruling by a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, which is sure to be appealed by the government, threatens the framework of the health care system for about 5 million Americans without employer-provided health plans.
Indeed, the ruling directly confronts the major reason the law was passed:
The ruling endorsed a controversial interpretation of the Affordable Care Act that argues that the HealthCare.gov subsidies are illegal because ACA does not explicitly empower a federal exchange to offer subsidized coverage, as it does in the case of state-created exchanges. Subsidies for more than 2 million people who bought coverage on state exchanges would not be affected by Tuesday’s ruling if it is upheld.
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HealthCare.gov serves residents of the 36 states that did not create their own health insurance marketplace. About 4.7 million people, or 86 percent of all HealthCare.gov enrollees, qualified for a subsidy to offset the cost of their coverage this year because they had low or moderate incomes.
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If upheld, the ruling could lead many, if not most of those subsidized customers to abandon their health plans sold on HealthCare.gov because they no longer would find them affordable without the often-lucrative tax credits.
Ultimately, this ruling will force Congress to take another look at the healthcare law – and this time, in a political pressure cooker. Perhaps they will read “what’s in the bill” before they pass a law this time.
