What just happened with Obamacare?
In a two-to-one decision, the U.S. Court of Appeals for the District of Columbia Circuit dealt a serious blow to Obamacare by ruling the government may not provide subsidies to encourage people to buy health insurance on the new marketplaces run by the federal government.
What did the court decide?
Section 36B of the Internal Revenue Code, enacted as part of the Patient Protection and Affordable Care Act (Obamacare) makes tax credits available as a form of subsidy to individuals who purchase health insurance through marketplaces—known as “American Health Benefit Exchanges,” or “Exchanges” for short.
This provision authorized low-income Americans to receive tax credits for insurance purchased on an Exchange established by one of the fifty states or the District of Columbia. (The credits were for household incomes between 100 and 400 percent of the federal poverty line.) But the Internal Revenue Service interpreted the wording broadly to authorize the subsidy also for insurance purchased on an Exchange established by the federal government.
The court ruled that a federal Exchange is not an “Exchange established by the State,” and section 36B does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges.
Can you explain that without the legalese?