The Court Decision That Could Challenge Obamacare

Screen shot 2014-07-24 at 10.37.51 AMIf a court decision made this week stands, affordable health insurance could soon be out of reach for some of America’s poorest. On Tuesday, a three-judge panel from the D.C. Circuit Court of Appeals ruled that the government cannot provide Obamacare subsidies to residents of states that never set up their own health insurance exchanges. These Obamacare subsidies helped to make insurance possible for low-income people by giving them large discounts on premiums.

This week’s Halbig v. Burwell decision came about all because of what Democrats have called a simple “wording glitch” in the Affordable Care Act. The ACA reads that the subsidies are available to anyone “enrolled through an Exchange established by the State.” The three-judge panel decided this excludes the 36 states that, instead of establishing a marketplace, defaulted to the federal exchange.

Obamacare proponents are arguing that the law intended for everyone to have access to the subsidies regardless of whether they were enrolled in a state-created exchange or in the federal exchange known as

The Fourth Circuit Court of Appeals in Richmond, Va. agreed with this logic, ruling in a separate case that the subsidies should apply to every state, merely hours after the Halbig ruling. This is a victory for the White House and helps to counteract the negative implications of the Halbig decision. The Obama administration said they will appeal Halbig case and ask the entire D.C. Circuit, which includes 11 judges, to revisit the case. This could likely swing in Obamacare’s favor since seven of the 11 judges are Democratic appointees. However, if this fails, the case could eventually wind its way to the Supreme Court.

The D.C. Court decision creates a considerable challenge to Obamacare. Cost is the main reason people will postpone urgent care or skip preventative care. If Halbig v. Burwell is upheld, it could strip 5 million Americans in those 36 states of affordable health insurance. And of course, most of the states that didn’t create their own exchanges are Republican states in the South and some of the poorest in the nation.

Photo courtesy of James Martin via Creative Commons 2.0.



Associate editor of Ms. magazine