Federal Appeals Court deals latest blow to Obamacare with Halbig v. Sebelius decision

On Tuesday, the U.S. Court of Appeals for the District of Columbia Circuit handed down its long awaited decision in Halbig v. Sebelius, which involved a group of small business owners who argued Obamacare – as it was written – authorizes subsidies only for people who buy insurance through state-run exchanges, not the federal government. In a 2-1 decision, the court sided with the business owners.

The Associated Press reports:

In a case before the U.S. Court of Appeals for the District of Columbia Circuit, a group of small business owners argued that the law authorizes subsidies only for people who buy insurance through markets established by the states – not by the federal government.

A divided court agreed, in a 2-1 decision that could mean premium increases for more than half the 8 million Americans who have purchased taxpayer-subsidized coverage under the law. The ruling affects consumers who bought coverage in the 36 states served by the federal insurance marketplace, or exchange.

The majority opinion concluded that the law, as written, “unambiguously” restricts subsides to consumers in exchanges established by a state. That would invalidate an Internal Revenue Service regulation that tried to sort out confusing wording in the law by concluding that Congress intended for consumers in all 50 states to have subsidized coverage.

Needless to say, the Obama Administration is expected to appeal the ruling.

Meanwhile, Bloomberg is reporting a U.S. appeals court in Virginia reached the opposite decision. The Virginia court found subsidies to buy health insurance under Obamacare can be provided to people using the federal and state-run marketplaces.

It remains to be seen what will happen next as this debate will undoubtedly reach the Supreme Court. As President Obama’s own constitutional law professor, Laurence Tribe, recently said, the Affordable Care Act will likely not survive this host of legal challenges. On radio this morning, Glenn was optimistic about what this latest decision means for the future of the law.

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