Judge to Rule on Obamacare Premium Subsidies

Image: Judge to Rule on Obamacare Premium Subsidies

Tuesday, 22 Oct 2013 10:59 AM

By Lisa Fergison

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Obamacare faces another potential landmine today.

A federal judge is expected to rule on the premium subsidies for low-income subscribers that are a key to the Affordable Care Act.

A group of businesses and individuals has sued over the subsidies, using the language of the healthcare act to challenge the system of subsidies, tax credits, and mandates.

New Medicare Warning: Obamacare Rule Changes Coming

According to Politico, plaintiffs argue that only those who get insurance through state-run exchanges — not those who are insured through federally run exchanges — are eligible for premium subsidies.

The plaintiffs are all from states that chose not to set up their own insurance exchange marketplaces. Their attorney, Michael Carvin, says none of his clients are eligible for the subsidies because the Affordable Care Act specifies that only state exchanges can offer them.

If no subsidies are available, Carvin argues, then his clients shouldn't have to face a tax penalty for not acquiring coverage under the law's individual-mandate requirement.

According to the Southeast Texas Record, the business plaintiffs also insist that this shortcoming in the law could force them to cut back on employee hours and severely burden their operations because employers and insurance companies might have to make up the shortfall in premium costs if subsidies are not available.

The plaintiffs have asked U.S. District Court Judge Paul Friedman in Washington, D.C., to issue an injunction blocking the subsidies, which take effect in January.

The Obama administration sought Monday, during three hours of argument before Friedman, to have the lawsuit dismissed, claiming the plaintiffs are outside their "zone of interest."

The judge, however, dismissed that argument as "silly." But Justice Department attorney Joel McElvain continued to insist that subsidies can be awarded through all insurance exchanges, whether run by the state or federal government. The law, he said, doesn't specify that because it was assumed by Congress that states would want to run their own exchanges.

But Carvin, Politico reported, told the judge that the administration's interpretation is flat wrong.

"They're trying to make a dog that doesn't bark, bark," he said, noting that Congress took the position that the subsidies should be used as an incentive to make states set up their own exchanges.

A similar lawsuit has also been filed in Oklahoma
. A ruling in that case is expected later this year.

New Medicare Warning: Obamacare Rule Changes Coming

Related Stories:

Obamacare Challenged in Suit Over Tax Subsidies

Obamacare Battle Still Being Fought in US Courtrooms

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