Obamacare Aid for Buyers on U.S. Exchange Splits Courts

by Andrew Zajac,  Bloomberg

Two U.S. appeals courts reached opposite conclusions on the legality of a key financing provision of the Affordable Care Act, increasing the chance of another showdown at the Supreme Court over President Barack Obama’s signature health-care law.

In majority ruling by judges appointed by Republican presidents, the U.S. Court of Appeals in Washington struck down an Internal Revenue Service rule providing tax subsidies to needy customers on the insurance exchange run by federal authorities, saying Congress authorized payments only on state-run marketplaces.

A panel of three judges in Richmond, Virginia, appointed by Democratic presidents reached the opposite conclusion hours later, saying that while the language of the law is ambiguous, the IRS had the discretion to write rules for the Patient Protection and Affordable Care Act.

The government will immediately seek review of the Washington court’s decision and in the meantime nothing has changed for people getting premium tax credits, Justice Department spokeswoman Emily Pierce said.

A White House official said the U.S. will seek petition the full Washington appeals court, where seven of the 11 judges were nominated by Democratic presidents, including four by Obama. The judges didn’t grant the plaintiff’s request for a suspension of the tax credits, the official said.

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