Judge Rejects Second Suit Challenging Federal Exchange Subsidies
On Wednesday, a federal judge in Virginia dismissed a lawsuit alleging that the subsidies to help U.S. residents purchase coverage through federal health insurance exchange are illegal, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 2/19).
Specifically, U.S. District Court Judge James Spencer ruled that the Internal Revenue Service has the authority to distribute federal tax subsidies to individuals who purchase insurance plans through the Affordable Care Act's federal health insurance exchange.
The ruling was the second of its kind in cases claiming the ACA's language does not permit the subsidies in states that have not established their own exchanges (Carlson, Modern Healthcare, 2/19). Last month, U.S. District Judge Paul Friedman rejected a similar lawsuit, saying that both the text of the ACA and the law's structure "make clear that Congress intended to make premium tax credits available on both state-run and federally facilitated exchanges" (California Healthline, 1/16). At least four similar cases have been filed throughout the country (Modern Healthcare, 2/19).
Details of Ruling
In his ruling on the suit, filed by four Virginia residents, Spencer wrote that while the plaintiffs' claims "on the surface" had "a certain common sense appeal, the lack of any support in the legislative history of the ACA indicates that it is not a viable theory." He added, "[W]hen statutory context is taken into account, plaintiffs' position is revealed as implausible."
Sam Kazman -- general counsel for the Competitive Enterprise Institute, which is involved in the case -- said the organization is considering appealing the ruling. He added that the ruling "contradicts established law on how statutes are to be construed and ends up allowing the [Obama] [a]dministration to substitute its version of [the ACA] for the law that Congress enacted" (Howell, Washington Times, 2/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.