Monday, September 22, 2014

DC Circuit Court of Appeals Reconsiders ACA Determination

Dianne De La Mare


The entire panel of the DC Circuit Court of Appeals has agreed to reconsider a three-judge panel decision that held that the Affordable Care Act (ACA) premium subsidies are not available to beneficiaries in federal exchange states. As reported in July, two federal courts had issued directly conflicting decisions on the same day regarding the availability of subsidies for health insurance purchased by individuals on exchanges established by the federal government under the ACA.

A three-member panel of the DC Circuit Court of Appeals had held that the subsidy is only available for insurance purchased on a state exchange (versus a federal exchange); invalidating the Internal Revenue Service (IRS) regulation that authorizes the subsidy for insurance purchased on a federal exchange (Halbig v Burwell).

Shortly thereafter, a three-member panel of the Fourth Circuit Court of Appeals reached the opposite conclusion, and held that subsidies are available to all individuals who purchase insurance from the federal government, regardless of whether or not those exchanges were established by the federal government (as in most states) or by an individual state.(King v Burwell).

If it is eventually determined that the IRS regulation is invalid and subsidies are not available on exchanges established by the federal government, then one leg of the government’s “three-legged stool” in the ACA is removed in more than ½ the states in the US.
Recall the solutions enacted in the ACA are often referred to as the “three legged stool” of health care and consists of:

1.) guarantee of insurance;
2.) mandate of insurance; and
3.) subsidies so that those who can’t afford insurance can get help.

AHCA/NCAL will continue to keep you informed as we follow this important litigation through the judicial process.


 

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