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Affordable Care Act
Tue July 22, 2014
Federal Courts Weigh in on Obamacare Subsidies
Should the federal government help Americans pay for their new health insurance plans under the Affordable Care Act? That's a question being tackled in courts across the country. Two of them have issued very different rulings.
The District of Columbia and 14 states operate their own exchanges under Obamacare. Connecticut is one of those states. The rest of the nation has opted to let the federal government operate its health care marketplaces, and that's raising a problem in the courts.
The Affordable Care Act is specific when it says that the subsidies are only for health insurance plans offered through state-based exchanges, not federal ones. Now the question is this: how literal a reading should that law get?
A court in Virginia has just ruled that the subsidy should apply to all Americans. A similar court in D.C., however, has just said the opposite: that the federal government shouldn't pay subsidies to people who live in states where it's running the exchange.
"It's a very literal interpretation of the language," said Kevin Counihan, who runs Access Health CT, the state's health insurance exchange. He said these rulings will have little effect in Connecticut. For him, that's a good thing. He said that 81,000 state residents have signed up for private health insurance under Obamacare. Of them, 75 percent are getting subsidies to help pay for it, and those payments average about $4,100. Nothing about those numbers is changed by the rulings.
"What this basically did," Counihan said, "was to reaffirm the value of a state-based exchange being able to offer subsidies to its state residents."
Meanwhile, both court rulings will likely face appeals.