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ACA subsidy case appealed to Supreme Court

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By Bob Herman, Crain News Service

WASHINGTON (Aug. 4, 2014) — Plaintiffs who lost in the 4th Circuit U.S. Court of Appeals ruling over the legality of health insurance subsidies being paid to those who bought plans on non-state exchanges have formally asked the U.S. Supreme Court to take up the case.

Three judges in the 4th Circuit ruled in King v. Burwell that health insurance subsidies granted through the Patient Protection and Affordable Care Act (ACA) were legal in both state and federal exchanges. The decision came mere hours after the D.C. Circuit Court in Washington produced a contradictory decision in Halbig v. Burwell. The Halbig ruling said the letter of the law forbade tax subsidies for exchanges not operated by states.

The conflicting rulings have led to a cloud of uncertainty about whether consumers in 36 states that rely on the federal exchanges will still receive subsidies, which lower monthly premiums, or if those subsidies will be lost once the Supreme Court rules on the issue.

Such a loss could gut the core of the Patient Protection and Affordable Care Act’s intent to insure more Americans since the vast majority of those who have obtained insurance received subsidies and presumably might not be able to afford insurance without them.

In a writ of certiorari to the Supreme Court from the conservative Competitive Enterprise Institute, the King plaintiffs said the highest court must make a final call to clear the air.

“Only this court can definitively resolve the matter; it is imperative that the court do so as soon as possible,” the petition reads.

However, some observers see the petition as a political ploy.

“It’s strategically wise from their perspective,” Harold Pollack, a social service and public health professor at the University of Chicago, said of the petition. “But it’s judicial activism.”

The King plaintiffs are likely trying to sidestep any type of en banc, or full court, hearing from the D.C. Circuit, Mr. Pollack said. The Obama administration had vowed to appeal to the full D.C. court, which has seven judges appointed by Democratic presidents versus four by Republicans. “The D.C. Circuit would almost certainly overrule the 2-1 decision that was made previously,” he said.

Legal experts previously told Modern Healthcare that if the D.C. appeals court reversed the initial ruling and said the IRS could allow subsidies on federal exchanges, it would be unclear if the Supreme Court would take up the case.

The Supreme Court does not have to hear the case. Each justice will vote to accept or reject the certiorari petition. At least four justices have to vote to accept a case.

This report appeared in Crain’s Modern Healthcare magazine, a Chicago-based sister publication of Tire Business.

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