Justice Dept. to Appeal Ruling That Cancels Obamacare Subsidies

Tuesday, 22 Jul 2014 01:10 PM

By Melanie Batley

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The Justice Department announced Tuesday that it would challenge a U.S. Court of Appeals ruling that would cancel Obamacare subsidies for millions of Americans who have signed up for healthcare using HealthCare.gov, the federal exchange, Politico reported.

"We believe that this decision is incorrect, inconsistent with congressional intent, different from previous rulings, and at odds with the goal of the law: to make healthcare affordable, no matter where people live," a Justice Department spokeswoman said, according to Politico.

"The government will therefore immediately seek further review of the court's decision."

The U.S. Court of Appeals for the D.C. Circuit ruled 2-1 that the health insurance subsidies, also known as premium tax credits, could only flow through state exchanges. The decision Tuesday was a potentially crippling blow to Obamacare.

The three-judge panel said that the way the Affordable Care Act is written makes it clear that the subsidy is only available to people who bought plans on the state-run exchanges.

About 5.4 million people signed up for coverage in the 36 states with a federal exchange. Of those, 87 percent received federal subsidies to purchase insurance, according to the Obama administration, Politico reported.

Only 14 states have opted to set up their own marketplaces, making delivery of tax credits via the federal exchange crucial to meeting Obamacare's goal of broadening healthcare coverage.

The case could eventually end up at the Supreme Court, Politico reported.

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