In April, I wrote about a legal challenge to Obamacare in which opponents had argued that the text of the ACA law only allowed state health exchanges to provide subsidies for the health insurance premiums and that the federal government should not have been allowed to provide subsidies through its own exchanges in those states that decided against setting up their own exchanges.
Today we had two conflicting appeals court rulings. In the DC circuit, the court ruled 2-1 that the federal exchanges were not allowed while in the Fourth Circuit the judges ruled unanimously that they were allowed.
The issue is how much deference should be given to agencies to interpret the wording of the text of a law when there is ambiguity.
So what’s next? In the DC circuit, the government will ask for an en banc review where all the judges will reconsider the case. If this case ends up in the US Supreme Court, there could be trouble, given the court’s recent string of rulings against the administration’s interpretation of laws. But that will not happen before the summer of 2015 at the earliest and by that time the law will be quite entrenched and withdrawing health insurance from possibly 10 million people will be politically problematic.