A 3-Justice panel of the U.S. Court of Appeals for District of Columbia Circuit has ruled that subsidies provided through federally run (HealthCare.gov) exchanges are illegal according to language in the Affordable Care Act (ACA).
The ruling of the 3-judge panel, while notable, does not carry with it the effect of law. The Administrations next move is likely to be a request that all 11 members of the D.C. Court of Appeals review the ruling. A decision by the majority of the courts justices upholding the ruling would have the effect of law. Over the past year, the Administration has appointed 4 new judges to the U.S. Court of Appeals for District of Columbia giving Democratically-appointed justices the majority for the first time in 4 decades.
In a separate ruling, also announced today, a 3-judge panel for the U.S. Court of Appeals for the Fourth Circuit issued a ruling contradictory to the D.C. Court of Appeals finding. In the Fourth Circuit, justices ruled that the ACA was ambiguous and, as a result, that IRS regulations allowing for the provision of subsidies through federally run exchanges should be upheld.
While the final outcome is still uncertain, and a Supreme Court challenge likely, the potential impact is undeniable.
Out of the nearly 7 million individuals who have received subsidies, nearly 5 million of them were from states with federally operated HealthCare.gov exchanges. Over 2 million individuals received subsidies from a state run exchange in one of the 14 states who opted to setup and run their own exchanges.