Major Victory For Obamacare As Federal Court Throws Out Subsidies Ruling

The D.C. Court of Appeals handed the Obama administration a victory reversing an earlier ruling that financial subsidies are not available for people who purchased health insurance on the federal exchange.

As NBC reported: “A three-judge panel of the D.C. Court of Appeals reached that conclusion in late July. On the same day, a federal appeals court in Richmond reached the opposite conclusion and said the subsidies are available,” adding that “the full D.C. Court of Appeals said it will re-hear the case, which erases the lower court ruling that went against the subsidies. This greatly diminishes the prospect that the U.S. Supreme Court will take up the issue in its coming term.”

Reuters adds that the U.S. Department of Justice asked for the rehearing after the administration lost the first decision in a July ruling noting that over five million people could be affected by that ruling if subsidies were to disappear from the federal marketplaces in states that did not create their own exchanges. Currently, 36 states lack their own exchange, which Reuters notes is “a central feature in the Obamacare system.

Government lawyers wrote in a court filing that the July decision, if left intact, would “impose a severe hardship” on people who currently get the subsidies in the form of tax credits. The appeals court’s ruling led to “harsh and illogical results,” the government lawyers’ court filing said.

Most important for the future of Obamacare, a favorable ruling for the Obama administration is expected from the full 13-member D.C. Court as, according to Reuters:

The decision to hear the case again was made by the court’s 11 active judges. Following a series of appointments to the court made by President Barack Obama, the court’s Democratic appointees have a 7-4 majority. Two senior judges who were part of the original three-judge panel will also participate in the rehearing. One is a Republican appointee and one a Democratic appointee.

The three-judge panel that ruled in July was split 2-1, with two Republican appointees in the majority.

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