Win Some/Lose Some: High Stakes Decisions On The Affordable Care Act Came Out For and Against the Administration
Please Note: This Healthcare Reform Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. Copyright © 2014 by Proskauer Rose LLP. All rights reserved.
July 22, 2014 marked a day when two different federal courts came out on opposite sides of the same question. In the morning, the U.S. Court of Appeals for the DC Circuit dealt a serious blow to the Obama Administration with a decision that called into question the structural integrity of the “pay-or-play” mandates under the Affordable Care Act (“ACA”). Later in the day, the U.S. Court of Appeals for the Fourth Circuit, sitting down the road in Richmond, came out on the other side of the question.
In Halbig v. Burwell, the Appeals Court for the District of Columbia Circuit, sitting in Washington, DC, sided with the plaintiffs and against the Obama Administration today when it held that the ACA, by its terms, does not allow for subsidies for individual coverage in exchanges established by the federal government. Today, a majority of the states—more than 30—have federally-run exchanges. This means that, at least according to this court, individuals purchasing insurance coverage on the federally-run exchanges will not be eligible for federal subsidies when they purchase insurance.
Not so fast, said the Fourth Circuit Court of Appeals later in the day. In King v. Burwell, the court addressed the same issue addressed in Halbig and reached the exact opposite conclusion. In King, four other judges found that Congress intended to make subsidies widely available. While the plain language of the ACA does not say it, the Fourth Circuit, found that the contextual meaning […]