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The administration is expected to appeal today's ruling.
The administration is expected to appeal today's ruling.
Image: AP/Press Association Images

Obamacare on the rocks? Controversial law hits major court setback

The ruling means many low and middle-income people could face price hikes.
Jul 22nd 2014, 4:39 PM 8,046 37

A FEDERAL APPEALS court has delivered a serious setback to President Barack Obama’s health care law.

The ruling could derail subsidies for many low and middle-income people who have bought policies.

If upheld, the decision could mean premium increases for more than half of the 8 million Americans who purchased taxpayer-subsidized insurance under the law.

It affects consumers who purchased their coverage through the federal insurance marketplace – or exchange- that serves 36 states.

A three-judge panel in Washington ruled 2-1 that the law, as written, only allows insurance subsidies in states that have set up their own exchanges. That invalidated an Internal Revenue Service regulation that allowed subsidies in all 50 states.

The majority opinion concluded that the law, as written, “unambiguously” restricts subsides to consumers in exchanges established by a state.

The issue is crucial to the success of the health law because most states have been unable or unwilling to set up their own exchanges. The inaction stems in many instances from opposition by Republican governors to Obamacare.

The health care law is Obama’s signature domestic political achievement and the most sweeping social reform in decades in the United States.

The law met with some of the most voracious opposition of the Obama presidency and in part led to the US Government shut down last year.

The administration is expected to appeal today’s ruling.

Read: US companies who object to contraception on religious grounds won’t have to pay for it >

Read: US Supreme Court upholds most parts of Obama’s landmark healthcare law >

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Associated Press

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