Confusion abounded last week when a pair of appeals courts issued conflicting rulings on whether subsidies legal in the Affordable Care Act's federal insurance exchanges. To help you make sense of the rulings, American Health Line collected some of the most interesting arguments on initial reactions, how the Supreme Court might read the issue and what might happen if the subsidies eventually are struck down.
Making Sense of Halbig, King and the Federal Exchange Subsidy Issue
This week, a comment posted on a piece in the Washington Post's "Volokh Conspiracy" uncovered recorded comments from a former aide to President Obama, who helped to craft the Affordable Care Act, that support arguments now being made in court challenges that claim subsidies to help U.S. residents purchase coverage through federal exchanges are illegal.
The remarks came from former Obama administration health policy adviser Jonathan Gruber in 2012. Gruber, now an economics professor at the Massachusetts Institute of Technology, said consumers were not eligible for the subsidies under the ACA if they live in states that did not run their own insurance exchanges. He said, "I hope that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges, and that they'll do it."
Last week, two federal appeals courts issued conflicting rulings on whether the federal government can provide the subsidies. A three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit in a 2-1 decision in the case Halbig v. Burwell ruled that the subsidies are illegal. Meanwhile, a three-judge panel for the 4th U.S. Circuit Court of Appeals in Richmond, Va., in the case King v. Burwell, unanimously ruled to uphold the subsidies.
The lawsuits target a May 2012 Internal Revenue Service rule that allows subsidies to be offered through the federal exchanges. The ACA states that the subsidies are available to certain U.S. residents to help them purchase health policies offered "through an exchange established by the state." However, the IRS rule allows the subsidies to be used in an exchange administered either by a state or the federal government. The rule did not clarify whether residents in states that fail or decline to establish exchanges would be eligible to receive the subsidies.
Supporters of the plaintiffs in the two lawsuits used the video as evidence to support the argument that the subsidies are illegal in the federal exchanges. For example, Tea Party Patriots co-founder Jenny Beth Martin said the comments were a "shocking revelation" that "[t]he administration ... knew exactly what they were doing and they knew exactly why they were doing it -- Gruber himself described it as blatant, ugly politics."
On Friday, Gruber distanced himself from his prior comments. He said, "I made a mistake in some 2012 speeches in describing the tax credits," adding, "It is clear from all my writings and modeling that I did over this same time period that [the] tax credits are assumed to be available in all states." He continued, "This is the only sensible reading of the [ACA] and is corroborated by every single person who helped craft the law."
Did Ex-Obama Aide Expose Congress' Real Intent for Federal Exchange Subsidies?