AHANewMazIcon
(Click to read AHA News newspaper stories)


Appeals courts issue opposing opinions on ACAs subsidies

July 25, 2014

A federal appeals court in Virginia July 22 upheld premium subsidies for health coverage purchased through federally facilitated exchanges, while its counterpart in Washington, D.C., rejected such subsidies in a separate case.

In both cases, the district courts upheld an Internal Revenue Service (IRS) rule providing premium tax credits to help low- and middle-income individuals afford insurance purchased through exchanges, whether state-run or federallyfacilitated. The Virginia appeals court unanimously upheld the IRS rule under the Affordable Care Act (ACA), while the D.C. appeals court reversed the district court in a 2-1 decision. The Virginia panel found the statute ambiguous, but said the IRS has some latitude to interpret the law. “We are primarily persuaded by the IRS Rule’s advancement of the broad policy goals of the Act,” the court said.

In the D.C. case, the 2-1 majority said the ACA “unambiguously” restricts the subsidy to insurance purchased on exchanges “established by the state.” They said the statute “unambiguously forecloses the interpretation embodied in the IRS Rule and instead limits the availability of premium tax credits to state-established Exchanges.” Subsidies will continue until a final legal decision is reached. The AHA submitted
friend-of-the-court briefs supporting the government in both cases ( Halbig v. Burwell and King v. Burwell). For more on the briefs, click on:

http://tinyurl.com/qffysj4
and http://tinyurl.com/krvy5h5.

“The American Hospital Association strongly supports subsidies that help patients purchase coverage on the federal exchanges,” said AHA President and CEO Rich Umbdenstock. “We support the 4th Circuit decision upholding federal subsidies and will continue to be active in this case as it appears headed to the Supreme Court over the next year or two to ensure individuals have access to the coverage they need.”