What Do The New Obamacare Rulings Mean For People Getting Subsidies?

The Affordable Care Act was the subject of two conflicting court opinions Tuesday. One upheld the subsidies that help middle- and low-income people afford health insurance; the other rejected them.

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RENEE MONTAGNE, HOST:

Clouding the future of the Affordable Care Act - two conflicting court rulings. Within hours of each other yesterday, U.S. appeals courts in Washington, D.C., and Richmond, Virginia reached very different conclusions about the legality of the billions of dollars in subsidies provided in the ACA's Federal Insurance exchange.

As NPR's John Ydstie reports, the resolution of the conflict, possibly in the Supreme Court, could determine the future of the program.

JOHN YDSTIE, BYLINE: Obamacare subsidies, which come in the form of tax credits, are key to making insurance affordable for most of the 8 million Americans who've signed up for the program. Melissa Trudeau, a 30-year-old graphic designer from Tyler, Texas with three young children, says, if the subsidies went away, her family couldn't afford to buy insurance.

MELISSA TRUDEAU: Right now the subsidy's covering about 50 percent of our premium, so there's no way. We would just have to drop our insurance and hope for the best I guess.

YDSTIE: And the D.C. Appeals Court said yesterday those subsidies are illegal. If the ruling is upheld, it's trouble for Trudeau and her family. Right now they pay about $236 a month for their plan. Without subsidies, it would cost about $500 a month. An amount out of reach for Trudeau and her husband, a corporate pilot who works on contract.

TRUDEAU: We work so hard for what we have, and to not even be able to afford insurance for our kids, I think - it's just - I don't think it's really right.

YDSTIE: The D.C. court found that the language in the Affordable Care Act clearly says that only people getting insurance through exchanges run by state governments can get subsidies. In Texas, where Trudeau lives, does not have a state exchange.

JONATHAN TURLEY: What's at stake is what may be the thumping heart of Obamacare.

YDSTIE: That's Jonathan Turley, a law professor at George Washington University.

TURLEY: One of the most unexpected developments under Obamacare is that the majority of states in the country opted not to create state exchanges.

YDSTIE: But now, the federal government runs the insurance exchanges in 36 states. The D.C. court's ruling puts a big question mark over whether the 4.6 million people now eligible for subsidies in those states will continue to get them. Again, Jonathan Turley.

TURLEY: In many ways, this interpretive question represents an existential threat to Obamacare.

YDSTIE: But Larry Levitt, a health policy expert, and senior vice president at the Kaiser Family Foundation, is more confident Obamacare will survive, even if the D.C. court's ruling is upheld.

LARRY LEVITT: No question, the ACA would survive in the states that are already running their own exchanges. And in many ways it's working quite well in those states.

YDSTIE: But in the states without their own exchanges, the political fight over whether to set them up is likely to be fierce. After all, says Levitt, 6.7 million Americans who live in those states now get their insurance through the federal exchange.

LEVITT: So a state deciding not to run its own exchange would be taking away tangible help that people are getting. At the same time, this remains a very divisive law, and it may be difficult for a governor in a very conservative state to look like he or she is somehow going along with Obamacare.

YDSTIE: The future for Obamacare would be much brighter if the ruling of the three-judge D.C. Appeals Court panel is struck down. The Justice Department will ask a larger panel from the same court to review the decision. The administration hopes that panel will agree with the 4th Circuit Court in Richmond, which ruled yesterday that the Obamacare subsidies are legal. Ultimately, the issue could end up in the Supreme Court, but a resolution is not likely until next year. In the meantime, the Justice Department says people getting premium subsidies via tax credits should know that nothing is changed, and those tax credits remain available.

John Ydstie. NPR News, Washington.

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