Eailene Knoche of Kirksville, Mo., had a roller coaster day Tuesday.
She gets a tax subsidy to buy her health coverage through HealthCare.gov, the federal insurance exchange. It saves her several hundred dollars a month.
On Tuesday, though, she heard the subsidy was in trouble. A federal appeals court had decided that financial help could be offered only on a state-run exchange, not HealthCare.gov.
So imagine Knoche’s relief just a few hours later when she was told a different court had reached the opposite conclusion — the subsidy on the federal exchange was not only legal, it found, but essential to the law.
“It’s very important,” the 51-year old cancer survivor said, referring to her $384 monthly premium support. “I wouldn’t have insurance any other way.”
Knoche’s experience may have ended happily for her now, but the ride is far from over. The conflicting appellate court opinions over the Affordable Care Act, also known as Obamacare, almost certainly guarantee a return to the U.S. Supreme Court for yet another landmark ruling on the complicated law.
An estimated 130,000 people in Missouri get subsidized health coverage through HealthCare.gov. About 45,000 get similar help in Kansas.
None faces the immediate loss of subsidized insurance, experts quickly said, and enrollment for next year will proceed as planned.
“There’s absolutely no change, no different actions to take,” said Wayne Powell, vice president and chief of staff at Blue Cross and Blue Shield of Kansas City. “It will be business as usual.”
Comments like that seemed to calm subsidized clients, who largely took the decisions in stride.
“I’ve received no calls from actual clients; only media and politicians are talking about it so far,” said Jeremy Milarsky, navigator program manager for Primaris, one of the two contractors in Missouri.
In the next 18 months, though, clients are likely to pay closer attention as the high court considers the fate of what all sides agree is a poorly written part of the health care law.
The original law established federal subsidies for health coverage through state-based insurance exchanges, the marketplaces where consumers could compare policies and purchase coverage. The subsidies — refundable federal tax credits intended to help poor Americans buy insurance — could be obtained only through the exchanges.
But the structure crumbled when 36 states declined to set up exchanges. Instead, the federal government assumed the task, offering subsidies through HealthCare.gov in states such as Missouri and Kansas.
The law’s opponents pounced. The law’s language, they pointed out, only specified subsidies in “state” exchanges, not the federal marketplace.
On Tuesday, in a 2-1 vote, the appeals court for the District of Columbia circuit agreed.
“An exchange established by the federal government cannot possibly be ‘an exchange established by the state,’” wrote Judge Arthur Randolph, quoting the law. “To hold otherwise would be to engage in distortion.”
But a three-judge appeals panel in the 4th Circuit, based in Richmond, Va., saw it differently.
“If Congress wanted to limit the availability of (subsidies) to consumers who purchase health coverage on state-run exchanges, it would have said so,” Judge Andre Davis wrote.
Democrats and Republicans reacted predictably to the split opinions.
“The (D.C.) court is just upholding the plain text of the president’s health care law, which was terribly written and poorly implemented,” said Sen. Roy Blunt, a Missouri Republican.
But “Congress intended for every eligible American to have access to tax credits that would lower their health care costs,” countered White House press secretary Josh Earnest.
Interest groups also weighed in.
“These subsidies should absolutely continue to be available to Missourians,” said Jen Bersdale of Missouri Health Care for All.
By contrast, “this is more bad news for Obamacare’s future,” said Nina Owcharenko of the conservative Heritage Foundation.
Benefits managers pleaded for some guidance.
“Uncertainty chills decision-making,” said James Klein of the American Benefits Council. “The courts need to quickly resolve this critical issue.”
That seems unlikely.
The government is expected to ask for a rehearing before the full D.C. appeals court, which is composed of more Democrats than Republicans, before pursuing a final appeal to the U.S. Supreme Court. The losing plaintiffs may also appeal.
Other experts said the Supreme Court might not be the final word on health insurance subsidies. States could now decide to establish exchanges, they said, or Congress could change the law, bypassing the courts.
“There are lots of twists and turns this could take,” said Powell of Blue Cross.
But those outcomes aren’t likely either. Members of Congress still bitterly debate the health care law, while lawmakers in states without exchanges seem uninterested in setting them up.
If the high court does rule that federal exchanges can’t give out subsidies, that could weaken the law’s mandate that individuals have health insurance, and open the possibility that employers in states without their own exchanges wouldn’t face penalties if they failed to provide affordable health insurance to their employees.
Tuesday’s rulings do not involve Medicaid, the health insurance program for the poor, or Medicare, the program for the elderly.
They also don’t affect hundreds of thousands of Missourians, Kansans and other Americans in the “donut hole” — those who earn too much for Medicaid coverage but not enough for federal subsidies. Those consumers were to have been protected by expanded Medicaid, but lawmakers in many states have refused to expand that program for their residents.
“Kansas and Missouri are already behind other states in reducing the number of uninsured,” said Bridget McCandless, a physician and chief executive of the Health Care Foundation of Greater Kansas City. “If this (D.C.) ruling is upheld, it will further hamper our ability to link the uninsured with affordable health insurance.”
McCandless said she is disappointed that foes of the health care law aren’t trying to fix its inconsistencies but “try and impede its implementation despite the growing evidence that it’s working.”
What happened Tuesday
One appeals court said health insurance subsidies aren’t legal in the 36 states that use HealthCare.gov, including Kansas and Missouri. A different appeals court said they are legal.
What happens now
No one getting subsidies now will lose them immediately. The U.S. Supreme Court will probably have the final say.
What could happen
The high court could decide to maintain the subsidies through HealthCare.gov or rule they are legal only through the state exchanges. States without exchanges could set up their own to give consumers access to subsidies. Or Congress could change the law.