Obamacare Subsidies Axed By DC Circuit Court: What It Means For You
The federal US Court of Appeals for the DC Circuit ruled 2-1 today against the Obama administration in the case of Halbig v. Burwell, reports Politico. This ruling effectively axed Obamacare subsidies for the citizens of those states that never established their own state exchange. As a result, these citizens cannot rely on federal tax-credit subsidies to offset the cost of any healthcare insurance they obtained (or plan to obtain) through the federally managed HealthCare.gov Obamacare exchange.
According to LA Weekly, this case, Halbig v. Burwell, came about after six plaintiffs (some individuals, some small businesses) across six states argued that “without the tax credits, they could have claimed exemption from the individual mandate because they would be deemed unable to pay for the coverage.” The premise is that the Obamacare subsidies and the resulting taxes are inextricably linked. Thus, removing the subsidies would therefore also put an end to the taxes and penalties.
So what does this ruling mean for you? Nothing for right now. Why? For one, the court chose to “not order the subsidies stopped immediately,” as it expects an immediate appeal to be filed by the Obama administration. Plus, according to the Washington Post, “a decision remains pending in King v. Sebelius before the U.S. Court of Appeals for the Fourth Circuit, and there are two pending cases in district courts.” All four cases (including Halbig v. Burwell) pertain to Obamacare subsidies, and the expectation is that all four cases will eventually hit the desk of the Supreme Court.
First, however, the Obama administration will most likely request what’s known as an en banc ruling. This would force the entire DC Circuit Court (and not just a three-judge panel, which is typical for circuit cases) to rule on Halbig v. Burwell. This is necessary because an appeals court cannot overrule a decision made by just a panel. The case must first be bumped up in priority.
For now, you can relax. However, if the full DC Circuit Court upholds the decision and demands that Obamacare subsidies be stopped, then the situation could get very iffy. If you live in one of the 36 states that never implemented an exchange, and you never signed up for Obamacare, then you would be in the clear, as today’s ruling nullifies the individual mandate. However, if you live in state that never implemented an exchange, and you did sign up for Obamacare, then your premiums could increase by up to 76 percent, or so claims Forbes.
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