By Brandon Moseley
Alabama Political Reporter
On Tuesday, July 22, a federal appeals court ruled that individuals cannot use tax credits or subsidies to buy health insurance on federally run exchanges. In a divided decision, the three-judge panel said that the way the law was originally written, cost-sharing subsidies can be used only through state-run health exchanges, not the federal exchanges.
Alabama Governor Robert Bentley (R) elected not to set up the exchange after a committee determined that running the healthcare insurance exchange would cost the state of Alabama millions of dollars a year. Alabama is one of the 34 states which refused to set up the state run exchange. Since Alabama and the majority of the states elected not to be parties to Obamacare, the Obama administration set up a massive federal exchange run by the Department of Health and Human Services and the Internal Revenue Service. On Tuesday, a three judge panel ruled that the Patient Protection and Affordable Care Act of 2010 does not give the federal government the authority to pay subsidies for health insurance on the federal exchange.
Alabama Republican Party Chairman Bill Armistead said on Facebook, “If upheld, today’s ruling by the federal appeals court will pull out the heart of ObamaCare. Obama’s attempts to circumvent Congress, even for his own signature piece of legislation, continue to be shut down by the courts. We could see the full repeal of ObamaCare in a few short years.”
Many of the people receiving coverage under the exchanges are having their coverage subsidized by the taxpayers. Without the subsidies, it is feared that many of the people who enrolled in the costly health insurance plans will not be able to afford them. Even before this health insurance industry experts were predicting that the unpopular Obamacare plans were seeing rising rates in most states for 2015. Many of the more onerous aspects of Obamacare including the employer mandate have been postponed by the Obama administration for years……some won’t go until full affect until the President leaves office.
The administration is expected to appeal the ruling which will likely be reviewed by the U.S. Supreme Court. Alabama joined a case before the Supreme Court challenging the constitutional authority of the individual mandates. While the Court in a split decision ruled against the states on the individual mandate it did rule that the states could not be compelled to participate in the costly Medicaid Expansion associated with Obamacare.
The Supreme Court has also ruled that the Obama administration does not have the authority to strip employers of their religious liberty to refuse to pay for abortifacients in the recent Hobby Lobby Decision. If the “Supremes” uphold the federal appeals court ruling, it would be another blow to the controversial health insurance reform legislation.