In a bold move, two of three judges on a D.C. Circuit Court of Appeals panel ruled that consumers who purchased health insurance through the federal health insurance exchange established under the ACA aren’t eligible for cost-sharing subsidies.1
The basis for the ruling by the two judges on the three-judge panel was that, because the federal subsidies were established in a part of the law referring to state exchanges, federal exchange consumers aren’t eligible for the subsidies.
The ruling has already been overturned by a three-judge panel from the 4th Circuit, and it’s possible that the 11-judge D.C. Circuit will rule as a full court to affirm the ACA, putting an end to this particular attempt to dismantle the law.
What the Ruling Would Mean, if Upheld
If the ruling were upheld, an estimated 5 million people in the 36 states that chose not to create health exchanges would no longer be provided with cost-sharing the subsidies to help cover the cost of coverage.
Many of these individuals would simply no longer be able to afford health insurance and would have little choice but to let their policies lapse. This would negate the purpose of the Affordable Care Act, which is to provide access to affordable health insurance. It would also mean that, in effect, they’d be breaking the law, since most Americans are required to have health insurance in 2014 or pay a penalty.
Thankfully, California consumers are not affected by the attempt to restrict consumers from accessing cost-sharing subsidies, since the state created its own exchange, Covered California.
The Certified Insurance Agents at Benefit Packages are specially trained to help consumers understand their options for coverage through Covered California, as well as their eligibility for cost-sharing subsidies and tax breaks. Call us today for a California health insurance quote.
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