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Judges split hairs on Obamacare

By Jay MacDonald · Bankrate.com
Tuesday, April 1, 2014
Posted: 6 am ET

A legal challenge to Obamacare based on four words contained within the mammoth 2,000-plus-page Affordable Care Act has drawn mixed reviews from a federal appeals court in Washington, D.C.

The lawsuit, filed by a group of small business owners, challenges Internal Revenue Service regulations that make income tax credits available to lower the cost of health insurance for qualifying individuals, regardless of whether they purchase that coverage through an exchange operated at the state or federal level. It's one of several such Obamacare challenges working their way through the courts.

No subsidies on HealthCare.gov?

The suit claims that, because the act specifically provides tax credits to individuals who enroll through an exchange "established by the state," they should not be available to those shopping for health insurance on HealthCare.gov. That's the federal site that serves as the default marketplace for the 36 states that exercised their right under the act to pass on setting up their own exchange.

As has happened in previous federal appeals of Obamacare, the three judges for the U.S. Court of Appeals for the District of Columbia seemed split along party lines.

Judge Thomas Griffith, an appointee of President George W. Bush, was skeptical of the Obama administration's legal position to offer tax credits through the federal portal. Judge A. Raymond Randolph, a George H.W. Bush appointee, called the launch of the exchanges "an unmitigated disaster." Judge Harry Edwards, an appointee of President Jimmy Carter, said such lawsuits are solely aimed "to destroy the individual mandate (requiring most Americans to purchase health insurance) and gut the statute."

Clear cut -- or 'frivolous'?

Writing in USA Today, Michael F. Cannon, director of health policy studies at the libertarian Cato Institute, a Washington, D.C.-based think tank that opposes Obamacare, said the suit makes clear that only those who enroll for health insurance "through an exchange established by the state" should be afforded tax credits.

But Ron Pollack, executive director of Families USA, a consumer group that supports health care reform, told The Associated Press that the Affordable Care Act clearly intends for all Americans to have access to affordable health coverage, regardless of where they purchase it. Pollack called the lawsuit "frivolous" and indicative of "Obamacare opponents' last and most far-fetched stand to destroy the Affordable Care Act."

What do you think? Could Obamacare be limited to the word of the law and not the intent? Or is such nitpicking merely an expensive waste of time?

This isn't the only big Obamacare issue making its way through the judicial system. Read about how the Supreme Court is weighing Obamacare birth control.

Follow me on Twitter: @omnisaurus.

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2 Comments
PSmith
April 12, 2014 at 6:05 am

ACA is a pack of lies. People don't understand how this abomination is going to ration healthcare and ruin the economy. It forced millions of people who were happily paying for excellent healthcare plans off of these plans with the intent of forcing them to pay for the "other half". This is purely un-American. What makes America great is that it's not like Europe or Canada. Obama's people are destroying this country and if the left takes over we are all done.

Terry Weaver
April 02, 2014 at 12:44 pm

It's a complete waste of time and a frivolous lawsuit and nothing more. The ACA is here to stay, over 7 million enrolled to date. You can't put the toothpaste back in the tube.

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