Obamacare may just have received its biggest setback yet. A federal appeals court has ruled that the ACA does not give the federal government the power to provide subsidies to consumers who buy coverage on state-run exchanges. If this decision stands, it could mean that more than 4.5 million people will lose subsidies. NYT has more:
The law “does not authorize the Internal Revenue Service to provide tax credits for insurance purchased on federal exchanges,” said the ruling, by a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit. The law, it said, “plainly makes subsidies available only on exchanges established by states.”
This decision could hobble the law, but it isn’t final. For starters, in theory it would be very easy to fix the language of the law to get around this ruling. Though the GOP-controlled House is unlikely to go for that, other courts are also litigating similar issues and we may yet see this ruling overturned. Either way, this isn’t a constitutional objection to the substance of the law but a secondary problem with the way it was written.But there are, in fact, deeper problems with the law that will remain no matter how this case ends. Politico reports that consumer blowback is pushing several states to broaden the ACA’s narrow networks. Restricting the number of hospitals and doctors patients can visit is an easy way to bring down premium costs, but consumers usually hate having their choices limited. Those in control of the ACA on the state level must now choose between higher premiums or fewer choices for patients. Both options lead to a PR nightmare. This tradeoff is at the heart of the ACA’s long term problems, and it isn’t going away.