September 23, 2014

Court rulings cause confusion on ObamaCare subsidies

A pair of federal court rulings on Tuesday are causing some uncertainty over whether those buying insurance through federal health exchange will continue to qualify for subsidies.

In one case, an appeals court in the District of Columbia Circuit ruled the residents of 36 states that rely on the federal exchange do not qualify for subsidies. However, in a ruling in the 4th Circuit Court of Appeals just hours later, judge said subsidies are available to all residents who qualify for them, regardless of whether an exchange is state-based or run by the federal government. Wisconsin is one of the three dozen states that uses the federal exchange.

A spokesperson for Governor Scott Walker called the D.C. ruling an example of “how irresponsible it is to pass a law without knowing what is in it and what its impact will be on hard-working Americans. The federal government’s one size fits all approach is unsustainable.”

While both cases are likely to face more appeals and the District of Columbia ruling did not include an injunction, Robert Kraig with Citizen Action of Wisconsin says now may be a good time for states like Wisconsin, which relies on the federal exchange, to revisit their decision. He says “a lot of people are depending on the subsides to make health care affordable,” and any decision to uphold the D.C. ruling could make it difficult for about 4.5 million people nationwide to continue paying for coverage. Kraig says Wisconsin already had a prototype for a state-based exchange developed, and it would “really behoove state officials to start looking at that, just in case.”

About 130,000 Wisconsin residents signed up for coverage through the federal exchange. Of those, Kraig says “many” are receiving some form of subsidy to help pay for their insurance, based on their incomes.