(Bloomberg) — The Obama administration asked the full U.S. Court of Appeals in Washington to reconsider a three-judge panel ruling that customers on the federal marketplace authorized by the health-care overhaul are ineligible for subsidies to buy insurance.
"The text, structure, and purpose" of the overhaul "make clear that tax credits are available to consumers 'regardless of whether the exchange on which they purchased their health insurance coverage is a creature of the state or the federal bureaucracy,'" government lawyers wrote in a request for re-hearing filed today.
The request is the first step in efforts to undo a 2-1 ruling on July 22 striking down an Internal Revenue Service rule providing the subsidies for needy customers on the insurance exchange run by the federal government.
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The panel ruled that the language of the law limited the subsidies to eligible customers of state-run exchanges. If upheld, the ruling is a potentially crippling blow to the Patient Protection and Affordable Care Act because only 14 states and the District of Columbia opted to set up their own exchanges.
Hours after the court issued its ruling, a three-judge panel in Richmond, Va., addressed the same issue and unanimously found that the IRS had the discretion to write rules authorizing credits for both state and federal exchanges.
The case is Halbig v. Sebelius, 14-5018, U.S. Court of Appeals for the District of Columbia (Washington). The Virginia case is King v. Sebelius, 14-1158, U.S. Court of Appeals for the Fourth Circuit, (Richmond, Virginia).
To contact the reporter on this story: Andrew Zajac in Washington at [email protected]
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