In a dramatic split decision, two federal appeals court panels on Tuesday disagreed on whether billions of dollars of government subsidies that helped 4.7 million people buy insurance on HealthCare.gov are legal.
A panel of federal appeals court that covers Washington. D.C., ruled in a 2-1 decision that the subsidies are illegal. But about two hours later, the federal Fourth Circuit appeals court’s own panel hearing a similar challenge in a 3-0 ruling said the subsidies are legal.
The split could lead to the US Supreme Court taking up the issue soon.
Earlier Tuesday, in the DC circuit , the judicial panel said such subsidies can be granted only to people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia—not on the federally run exchange HealthCare.gov.
The ruling relied on a close reading of language in the Affordable Care Act.
“Section 36B plainly makes subsidies available in the Exchanges established by states,” wrote Senior Circuit Judge Raymond Randolph, who was joined by Judge Thomas Griffith in the majority decision on the case known as Halbig v. Burwell.
“We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.”
In his dissent, Judge Harry Edwards, calling the case a “not-so-veiled attempt to gut” Obamacare, wrote that the ruling “portends disastrous consequences.”
Indeed, the 72-page decision threatens to unleash a cascade of effects that could seriously compromise Obamacare’s goals of compelling people to get health insurance, and helping them afford it.