Wednesday, March 26, 2014

Halbig v. Sebelius


Issue: "At issue in this case is whether the ACA allows the IRS to provide tax credits to residents of states that declined to establish their own health insurance Exchanges, that is, in states where the federal government has stepped in and is running the Exchange."

Conclusion: "The Court finds that the plain text of the statute, the statutory structure, and the statutory purpose make clear that Congress intended to make premium tax credits available on both state-run and federally-facilitated Exchanges. The Court therefore concludes that "Congress has directly spoken to the precise question" of whether an "Exchange" under 26 U.S.C. § 36B includes federally-facilitated Exchanges.  ... For the reasons discussed above, the Court finds that the IRS Rule is consistent with the text, structure, and purpose of the Affordable Care Act. Section 36B must be read as authorizing the IRS to deliver tax credits to individuals purchasing health insurance on federally-facilitated Exchanges."

In the case before the U.S. Court of Appeals for the District of Columbia Circuit, a group of small business owners says the law authorizes tax credits only for people who buy insurance on exchanges established by the states. The business owners are challenging an Internal Revenue Service regulation based on the act that says the tax credits are available to all qualifying individuals, regardless of whether they buy insurance at the state level or federally.  The case revolves around four words in the law, which says the tax credits are available to people who enrolled through an exchange "established by the state."
The third judge on the appeals court panel, Thomas Griffith, expressed skepticism over the administration's argument that the subsidies are available regardless of whether people buy insurance on a state-run or federally facilitated exchange.

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