Court Rules Individuals Can't Use Gov. Subsidies to Buy Health Insurance on Federal-Run Exchanges

By Joe Gullo , CNN

Published 07/23 2014 11:19AM

Updated 07/23 2014 11:28AM

WASHINGTON - Two federal appeals courts rule on a key component of the Affordable Care Act on the same day, with very different outcomes. One ruling, has the potential to deal a big blow to President Obama's signature law.

The U.S. court of appeals for the D.C. circuit ruled that individuals cannot use government subsidies to buy health insurance on federally-run exchanges, only the state-run exchanges.

If that ruling holds, millions of Americans may not be able to afford the coverage that puts them in line with the law's requirement that all Americans have insurance.

Writing for the 2-1 majority, Judge Thomas Griffith said:

"We reach this conclusion, frankly, with reluctance. 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."

In a separate case, a federal appeals court in Richmond, Virginia ruled unanimously in favor of the subsidies. Because of similar legal challenges, the White House says it's confident in the Justice Department's appeal of the D.C. court's ruling.

"You don't need a fancy legal degree to understand that Congress intended for every eligible American to have access to taxpayer credits that will lower their health care costs, regardless of whether it is state officials or federal officials who are running the marketplace," White House Press Secretary Josh Earnest said.

For now, the tax credits will remain available, coverage unaffected, the law unchanged. The legal process will likely, eventually, put the Affordable Care Act back up to the Supreme Court.

Federal Tax Credit Amount by State

States highlighted in gray do not participate in the federal-run exchanges. They have state-run health care exchanges.
Map Key: Yellow: $150-$200, Orange: $201-$250, Light Red: $251-$300, Dark Red: $301-$350, Purple: $351-$450.

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