Two Federal Courts Rule on Subsidies
Note: On November 7, 2014, the U.S. Supreme Court indicated that it would hear the King v. Burwell case, a challenge to the subsidies offered to those purchasing insurance through federal exchanges. A decision is expected by June 2015.
July 23, 2014
Two federal appeals courts have recently issued contradictory rulings on whether individuals enrolling in health plans offered through Marketplaces run by the federal government are eligible for subsidies to help pay for their coverage.
The D.C. Circuit Court of Appeals ruled that subsidies could go only to individuals enrolled through Marketplaces established by states. The Fourth Circuit Court of Appeals (Richmond, VA) ruled that individuals enrolled through Marketplaces established by the federal government are eligible for subsidies.
Only 16 states and the District of Columbia set up their own Marketplaces. All other states deferred to the federal Marketplace.
In both cases, a review by the full panel of judges on each of these Circuit Courts may be requested, and appeals to the Supreme Court are likely if the lower courts remain split.
The law remains unchanged and current subsidies will remain in place until the legal case plays out.
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