WASHINGTON – A federal judge Wednesday emphatically rejected a last-ditch challenge to President Obama’s healthcare law, ruling that the Affordable Care Act allows low-income Americans to get government subsidies to buy health coverage no matter what state they live in.
Critics of the law argued that the statute, passed by Congress in 2010, limited these subsidies to consumers in states that operate their own insurance marketplaces.
Only 14 states do that; the remaining 36 rely on the federal government to run their marketplaces, or exchanges.
The marketplaces, which opened Oct. 1 for 2014 coverage, are designed to allow Americans who do not get coverage through an employer to shop among plans that must meet new basic standards. Consumers who make less than four times the federal poverty level – or about $94,000 for a family of four – qualify for tax credits to offset the costs of their premiums.
To date, nearly 80% of the approximately 2.2 million people who have signed up for health plans on the new marketplaces have qualified for subsidies, according to data from the Department of Health and Human Services.
The subsidies are widely seen as critical to the law’s success, especially as the law also requires most Americans to have coverage.
Few legal experts believed that this legal attack on the law had much credibility, as the congressional leaders who wrote the law clearly intended the subsidies to be available nationwide.
In his ruling, Judge Paul L. Friedman of the U.S. District Court for the District of Columbia flatly rejected the plaintiff’s claims. “The plain text of the statute, the statutory structure, and the statutory purpose make clear that Congress intended to make premium tax credits available on both state-run and federally-facilitated exchanges,” he concluded.
Three similar suits are still pending before other judges around the country.
Friedman was appointed to the federal bench by President Clinton.
[Updated, 3:05 p.m., Jan. 15: The plaintiffs in the case – led by Virginia resident Jacqueline Halbig – include individuals and employers from states whose insurance marketplaces are being operated by the federal government.]
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