Appeals Court Says Many Obamacare Subsidies Are Illegal – Updated

A federal appeals court has ruled in the case of Halbig v. Burwell, and they did not rule in favor of the Obama administration. The three judge panel ruled that federal Obamacare subsidies for residents of the 36 states that did not set up their own exchanges are illegal. Expect this case to go to the Supreme Court.

CNBC has the breaking news:

In a potentially crippling blow to Obamacare, a top federal appeals court Tuesday said that billions of dollars worth of government subsidies that helped 4.7 million people buy insurance on HealthCare.gov are not legal under the Affordable Care Act.

In its decision, a three-judge panel said that such subsidies can be granted only to people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia — not on the federally run exchange HealthCare.gov. Plaintiffs in the case known as Halbig v. Burwell argued that the ACA, as written, only allows that often-significant financial aid to be issued to people who bought insurance on a marketplace set up by a state.

The decision is certain to be challenged by the Obama Administration, and does not immediately have the effect of law. But if it is ultimately upheld, it would cause insurance rates for those people who lost the subsidies to dramatically rise. (Read More)

Update: Check out the horrible argument the administration used to defend the subsidies. Also, the White House is going to ignore this decision. What a surprise.