Today’s Conflicting Court Decisions Won’t Affect Federal Marketplace Subsidies

Two federal appellate courts issued rulings today that relate to the health reform law.  In a unanimous decision, a panel of the U.S. Circuit Court of Appeals for the Fourth Circuit upheld a lower court decision finding that individuals are eligible for premium subsidies to purchase health insurance through the federal marketplace, just as they can in state-based marketplaces.

In a 2-1 decision that has received considerably more media attention, the D.C. Circuit Court of Appeals overturned a lower court ruling and ruled that premium subsidies can be used to purchase coverage only through state-run marketplaces, and not through the federal marketplace.

What do these decisions really mean?

• Premium subsidies for the millions of federal marketplace enrollees will continue to be available, as the Administration confirmed today.
• The Administration will appeal the D.C. Circuit court decision to the entire D.C. Circuit, where it will likely be reversed, as Washington and Lee University School of Law professor Timothy Jost explained earlier this month.
• That’s because, as we first noted two years ago, the merits of the legal theory challenging subsidies for federal marketplace enrollees are extraordinarily weak, relying on a distorted, incorrect reading of the Affordable Care Act and ignoring legislative intent and history.