U.S. District Judge Rules Against Obamacare Subsidies
By Dr. James Palermo // October 3, 2014
OBAMA ADMINISTRATION TO APPEAL RULING
A federal judge in Oklahoma ruled Tuesday that people in states that purchase health insurance on the Affordable Care Act’s (ACA, aka Obamacare) federal insurance exchange are not eligible for premium subsidies to help them pay for coverage.
U.S. District Judge Ronald White, who was appointed by Republican President George W. Bush George, invalidated an Internal Revenue Service rule that interpreted the ACA to allow premium tax credits in states that have not established their own exchange, and wrote, “The court holds that the IRS Rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law.
In response to the argument that striking down the subsidies may disrupt the entire healthcare reform law, Judge White wrote, “Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will.”
With a spokesman from the U.S. Department of Justice declaring immediately after the ruling that the Obama administration will appeal his decision, White put his ruling on hold pending that appeal, which means subsidies will continue to be available in Oklahoma.
The issue of whether the subsidies in states that have not established their own insurance exchange are legal is being fought in several courts across the country and will most likely end up being decided by the U.S. Supreme Court. The outcome of the legal challenge will determine whether the subsidies will be available in all 50 states or only in some, and be pivotal in the ultimate sustainability of Obamacare.