A Federal appeals court effectively gutted the Affordable Care Act on Tuesday, banning the federal exchange from providing subsidies in the 36 states it serves. The panel consisted of two Republican-appointed judges, and one appointed by Democrats.
A three-judge panel ruled 2-1 that billions in subsidies that helped nearly 5 million people buy insurance on HealthCare.gov are illegal. The panel ruled that subsidies can only be granted to people who purchased insurance through state exchanges or in the District of Columbia–not HealthCare.gov. The problem, of course, is that numerous states have refused or neglected to set up their own exchanges.
“Section 36B plainly makes subsidies available in the Exchanges established by states,” wrote Senior Circuit Judge Raymond Randolph in his opinion, where he was joined by Judge Thomas Griffith “We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.”
On the above map, the blue states are unaffected. All other states, thanks to decisions to opt-out of serving their citizens by setting up a state exchange, are now failing residents in need.
In his dissent, Judge Harry Edwards, who called the case a “not-so-veiled attempt to gut the Patient Protection and Affordable Care Act,” wrote that the judgement “portends disastrous consequences.”
The Obama administration will likely seek a reversal of the decision, which does not immediately have the effect of law, in a vote by the full bench. The vote will likely be friendlier to sensibility, as it would include eight Democratic and five republican appointees.
Read the ruling below: