Subsidies in 36 states thrown out by appeals court: 5 things to know

A three-judge panel of the D.C. Circuit Court of Appeals in Washington has ruled tax subsidies to low-and middle-income Americans may not be provided in states that use the federally-run health insurance exchanges.

Here are five things to know about the lawsuit and the court's ruling.

1. 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, three private employers and four individual tax payers filed a lawsuit claiming the PPACA barred the government from providing tax subsidies in states that did not establish their own exchanges.

2. Since only 16 states have created their own insurance marketplaces, officials from the Internal Revenue Service claimed the wording of the PPACA contradicted the intent behind the law, which was to expand insurance coverage in the U.S. 

3. The majority of the three-judge panel did not agree with the IRS. Rather, the case was sent back down to the lower court with instructions to rule in favor of the appellants.

4. The court's ruling could have an extremely negative effect on the success of the PPACA, as 27 states have not set up their own marketplaces, and another nine states have partially opted out, according to a Washington Post report.

5. The court's ruling will likely be appealed to the U.S. Supreme Court. 

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Halifax Paid $22.8M in Attorney Fees Defending Lawsuit

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