A federal judge in Oklahoma ruled Tuesday that Affordable Care Act federal subsidies cannot be issued to residents living in states that do not run their own exchanges.
This marks the second ruling against ACA subsidies--in the July case of Halbig v. Burwell, the D.C. Circuit Court of Appeals ruled that subsidies are illegal on federal exchanges. A few hours later on that same day, in the case of King v. Burwell, the 4th Circuit Court of Appeals in Richmond, Virginia, ruled that state- and federal-run exchanges can provide subsidies.
Judge Ronald A. White, who issued the ruling, said that federal subsidies do not align with the healthcare reform law.
"The administration and its bureaucrats in the IRS handed out billions in illegal tax credits and subsidies and vastly expanded the reach of the healthcare law because they didn't like the way Congress wrote the Affordable Care Act," White said at the ruling, according to Politico. "That's not how our system of government works."
If the ruling is upheld, it may affect more than 4.5 million individuals who previously were found eligible for subsidized coverage, reports the New York Times.
Yet at the ruling, Judge White reiterated that under the ACA, the law specifically states that financial aid is available only for insurance purchased "through an exchange established by the state." He then went on to argue that the word "state" does not mean "federal government."
But the Obama administration argued that it intended for all Americans who are eligible to receive subsidized coverage, despite whether or not a state established its own ruling, according to the ruling.
The Obama administration is expected to appeal this ruling to the 10th Circuit. It's now more likely that the Supreme Court will ultimately decide this case.