WASHINGTON (AP) — President Barack Obama’s health care law is enmeshed in another big legal battle after two federal appeals courts issued contradictory rulings on a key financing issue within hours of each other Tuesday.
A divided court panel in Washington called into question the subsidies that help millions of low- and middle-income people pay their premiums, saying financial aid can be paid only in states that have set up their own insurance markets, or exchanges.
About 100 miles to the south in Richmond, Virginia, another appeals court panel unanimously came to the opposite conclusion, ruling that the Internal Revenue Service correctly interpreted the will of Congress when it issued regulations allowing consumers in all 50 states to purchase subsidized coverage.
The White House immediately declared that policyholders will keep getting financial aid as the administration sorts out the legal implications.
Spokesman Josh Earnest said the adverse decision in Washington would have “no practical impact” on tax credits as the case works its way through the courts.
Both cases are part of a long-running political and legal campaign to overturn Obama’s signature domestic legislation by Republicans and other opponents of the law.
In the Washington case, 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.
That’s no mere legal distinction, since the federal government is running the markets, or exchanges, in 36 states.
A divided court agreed with that objection, in a 2-1 decision that could mean premium increases for more than half the 8 million Americans who have purchased taxpayer-subsidized private insurance under the law.
Two judges appointed by Republican presidents voted against the administration’s interpretation of the law while one appointed by a Democratic president dissented.
The Obama spokesman said the administration would seek a hearing by the full 11-judge court. The full court has seven judges appointed by Democratic presidents, including four appointed by Obama.