Court rules subsidies legal in all states, on both exchanges

A federal judge in Virginia has dismissed a lawsuit that claimed subsidies available under the Affordable Care Act are only legal in states that operate their own health insurance exchange.

In the case, King v. Sebelius, four Virginia residents alleged that the ACA's wording used to describe subsidy eligibility implies that premium assistance is available only for consumers in states with the federal marketplace, reported the Washington Times. The plaintiffs claimed the phrase "established by the state" rather than "established under this act" limits the tax credits to those states running their own exchanges.

Although the plaintiffs' "plain meaning interpretation" of the ACA has a "certain common sense appeal," Judge James Spencer from the U.S. District Court for the Eastern District of Virginia ruled that legislative history fails to support their claim, The Hill's Healthwatch reported.

"It seems comprehensible that the omission of any mention of federally-facilitated Exchanges under [the relevant] could imply that Congress intended to preclude individuals in federally-facilitated Exchanges from receiving tax subsidies," Spencer wrote. "However, when statutory context is taken into account, Plaintiffs' position is revealed as implausible."

The case is similar to another lawsuit brought by a group of individuals and employers that is under appeal in the District of Columbia. The U.S. District Court for the District of Columbia ruled in that case, Halbig v. Sebelius, that subsidies can be provided to consumers regardless of whether coverage comes from a state- or federal-run marketplace.

To learn more:
- here's the ruling (.pdf)
- read the Washington Times article
- see The Hill's Healthwatch article

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