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The facts, faces and hum of local politics with Steve Kraske and Dave Helling

After conflicting rulings, Obamacare subsidies up in the air for 175,000 in Kansas, Missouri

07/22/2014 9:57 AM

07/22/2014 12:28 PM

Two federal appeals courts differed sharply Tuesday over whether the federal government can subsidize health insurance for people who buy coverage through the federal health exchange.

In the morning, the appeals court in the District of Columbia said those subsidies were illegal. A few hours later, an appeals panel in the 4th Circuit reached exactly the opposite conclusion.

The contradictory rulings almost certainly guarantee another trip to the Supreme Court for Obamacare. They also probably mean the subsidies are not in any immediate jeopardy.

According to estimates, about 130,000 Missourians selected an exchange insurance plan and were also eligible for subsidies. In Kansas, roughly 45,000 got insurance and were subsidized.

Neither state has its own health insurance exchange — instead, the federal government provides that service through healthcare.gov.

The D.C. appeals court vote to discard the federal exchange subsidies was 2-1. The two voting against the subsidies were appointed by a Republican president, while the dissenter was appointed by a Democrat.

The 4th Circuit vote upholding the subsidies was 3-0. All were appointed by Democrats.

From the D.C. opinion rejecting the subsidies:

“At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.

“But, high as those stakes are, the principle of legislative supremacy that guides us is higher still. Within constitutional limits, Congress is supreme in matters of policy, and the consequence of that supremacy is that our duty when interpreting a statute is to ascertain the meaning of the words of the statute.”

From the 4th Circuit opinion upholding the subsidies:

“What they may not do is rely on our help to deny to millions of Americans desperately-needed health insurance through a tortured, nonsensical construction of a federal statute whose manifest purpose, as revealed by the wholeness and coherence of its text and structure, could not be more clear.”

The case will be appealed to the Supreme Court.

There probably will also be an effort to have the entire appeals court rehear the case, and stay the implementation of the ruling until the legal process is finished.

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