Fourth Circuit contradicts D.C. circuit concerning PPACA subsidies

A three-judge panel from the Fourth U.S. Circuit Court of Appeals has unanimously held low- and middle-income Americans in all states can legally receive subsidies for health insurance under the Patient Protection and Affordable Care Act, even if their state uses a federally-run health insurance exchange.

The court's ruling came just two hours after a three-judge panel of the D.C. Circuit Court of Appeals in Washington ruled tax subsidies may not be provided in states that did not establish their own exchanges.

The PPACA states tax subsidies for health insurance are to be provided "through an exchange established by the state." Based on the text of the law, lawsuits were filed challenging an IRS regulation that allows for subsidies in all states. 

The IRS' interpretation of the PPACA was based on intent. Since only 16 states have created their own insurance marketplaces, officials from the IRS claimed the wording of the PPACA contradicted the intent behind the law, which was to expand insurance coverage in the U.S.

The majority of the three-judge panel in the D.C. Circuit disagreed with the IRS. The case was sent back down to the lower court with instructions to rule in favor of the appellants — three private employers and four individual tax payers who had filed the lawsuit.

However, the Fourth Circuit Court of Appeals agreed with the IRS. Federal Judge Roger Gregory wrote that the challengers could not "rely on our help to deny to millions of Americans desperately-needed health insurance through a tortured, nonsensical construction of a federal statute whose manifest purpose, as revealed by the wholeness and coherence of its text and structures, could not be more clear."

More Articles on Healthcare Industry Lawsuits:

Subsidies in 36 States Thrown Out By Appeals Court: 5 Things to Know
House GOP to Move Forward With Lawsuit Against President Obama
12 Recent Lawsuits, Settlements in the Healthcare Industry


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