Earlier this morning, the DC Circuit Court of Appeals released a decision saying that the Affordable Care Act (ACA) only authorized health insurance subsidies for state-based Marketplaces, essentially rendering subsidies invalid in the 36 states with federally-facilitated and state-partnership Marketplaces. Just a few hours later, the Virginia Circuit Court of Appeals upheld the subsidies in federally-facilitated and partnership Marketplaces.
So, what does this mean for subsidies in Wisconsin, a federally-facilitated Marketplace?
Nothing, for now.
More on the cases:
Halbig v. Burwell (Decision here): Three-judge panel of the DC Circuit Court of Appeals: This panel voted 2-1 against the subsidies, agreeing with the plaintiffs that the text of the ACA does not permit federal subsidies outside of state-based Marketplaces. The federal government has stated that it will request an “en banc” review of the decision – meaning all eleven DC Circuit Court judges would review the decision, potentially reversing the decision of the three-judge panel.
King v. Burwell (Decision here): Three-judge panel of the Virginia Fourth Circuit Court of Appeals: This panel voted 3-0 to uphold the subsidies, agreeing with the Obama Administration that the law does not limit the subsidies to state-based Marketplaces. The plaintiffs could request an “en banc” review of this decision as well, to have all judges in the Circuit Court review and rule.
These cases are, indeed, contradictory.
And there are more cases on the legality of subsidies still pending: Pruitt v. Burwell (US District Court Eastern District of Oklahoma) and Indiana v. IRS (US District Court Southern District of Indiana).
These cases will likely both be heard and decided by all eleven judges in each jurisdiction, and could result in reversal or upholding of the three-judge panel decisions. Cases that have differing and contradictory rulings at the District Court of Appeals levels are more likely to be reviewed by the Supreme Court – however, the Supreme Court could decide to hear the case regardless of Court of Appeals’ opinions. Whether or not the Supremes hear this issue is unclear.
Why this Matters:
In our Federally-Facilitated Marketplace in Wisconsin, subsidies make a difference in people choosing to purchase health insurance through the Marketplace. According to the Summary Enrollment Report Addendum, 91 percent of Wisconsinites who selected a Marketplace plan had financial assistance through the subsidies. Avalere Health estimates Wisconsin consumers would see a 70-74 percent increase in premiums if the subsidies were deemed invalid outside of state-based Marketplaces. These cases could potentially have big consequences on the ACA – but not yet.