A federal appeals court has delivered a serious setback to President Obama’s health care law, potentially derailing subsidies for many low- and middle-income people who have bought policies. If upheld, the decision could mean premium increases for more than 5 million of the 8 million Americans who purchased taxpayer-subsidized insurance under the law. It affects consumers who purchased their coverage through the federal insurance marketplace—or exchange—that serves 36 states who did not set up their own.
A three-judge panel in Washington, DC, ruled 2-1 that the law, as written, only allows insurance subsidies in states that have set up their own exchanges. That invalidated an Internal Revenue Service regulation that allowed subsidies in all 50 states. The Washington Post also sees it as as “serious setback” to the law, if it’s upheld. “It represents a potentially crippling blow to the health-care law, which relies on the subsidies to make insurance affordable for millions of low- and middle-income Americans.” NPR notes that the Obama administration will likely ask that the full 11-judge panel hear the case, and could appeal to the Supreme Court.