Judge Rejects Lawsuit on Scope of Obamacare Subsidies

Wednesday, 19 Feb 2014 11:24 AM

By Melanie Batley

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A federal judge has rejected a lawsuit that claims Obamacare subsidies can only be paid to individuals in states that set up their own healthcare exchanges, even though the Affordable Care Act was worded that way.

According to The Washington Times, four Virginia residents filed the lawsuit because the Obamacare subsidy in their state makes them subject to the law's individual mandate, which requires most Americans to purchase health insurance this year or face a fine.

The decision has been a setback for Republican lawmakers and limited government advocates seeking to roll back the scope of the law, and who criticize the Obama administration for making unilateral decisions about the way the federal healthcare law should be applied.

"While on the surface, Plaintiffs' plain meaning interpretation of [that section of the law] has a certain common sense appeal, the lack of any support in the legislative history of the ACA indicates that it is not a viable theory," wrote U.S. District Court Judge James Spencer in his decision, according to the Times.

Without the subsidy, the plaintiffs would have qualified for a financial-hardship exemption because the cheapest plan available on the federal Obamacare exchange exceeds 8 percent of their projected 2014 household income.

Similar lawsuits are in progress in other states and, if successful, millions of Americans would not be eligible for the subsidie,s which are a fundamental element to the viability of the new law.

The federal Obamacare website, HealthCare.gov, is administering the new healthcare law in the 34 states that refused to set up their own exchanges.

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