D.C. appeals court decision undermines hopes of ACA opponents

September 4, 2014

Rehearing could lessen possibility of Supreme Court ending availability of tax subsidies to buy health insurance

Efforts by opponents of the Affordable Care Act (ACA) to derail the legislation through the courts appear to have experienced a setback as a result of a decision by a federal court to hear a case challenging a key element of the legislation.

On Thursday the U.S. Court of Appeals for the District of Columbia agreed to have all 11 of its members hear the case of Halbig vs. Burwell. The plaintiffs in the case claim that the tax subsidies designed to help low-income Americans purchase health insurance through insurance exchanges should be available only to those purchasing it through state-based exchanges, and not through healthcare.gov, the exchange operated by the federal government. Removing the subsidies would effectively make insurance unaffordable for most of those buying insurance through healthcare.gov.

In July, a three-judge panel of the Court ruled two to one in favor of the plaintiffs, agreeing that the subsidies made available through the ACA applied only to the state exchanges. At the same time, however, another federal appeals court ruled against the plaintiffs, thereby making it likely that the U.S. Supreme Court would ultimately decide the case and raising the possibility that the Supreme Court could eliminate the subsidies.

However, most legal experts believe that the full D.C. Court of Appeals will overturn the July ruling, because a majority of the court’s members were appointed by Democratic presidents. If that were to happen it would remove the disagreement with the other appeals court, giving the Supreme Court less reason to take up the case.

Arguments before the full D.C. Court of Appeals are scheduled for December 17.