D.C. Court Cancels Arguments In Obamacare Subsidies Case

Font Size:

A federal appeals court canceled arguments scheduled to take place in December over Obamacare premium subsidies due to the Supreme Court’s decision last week to take up a similar case itself, The Wall Street Journal reports.

The U.S. Court of Appeals for the D.C. Circuit was supposed to hear arguments in December in Halbig v. Burwell, a case which challenges an IRS rule which allows the federal government to give out premium tax credits in federally-run exchanges, arguing that Obamacare restricts the subsidies to state-run exchanges only.

The D.C. circuit originally ruled 2 to 1 against the subsidies, on the same day that the Fourth Circuit ruled for subsidies in federal exchanges in King v. Burwell, a similar case. The Obama administration asked the D.C. circuit to rehear its case en banc — with all the court’s judges instead of the usual three judge panel, and the court accepted the hearing and vacated their original decision.

But now the Supreme Court has decided to hear King v. Burwell itself. Just 13 states and Washington, D.C. have established state-based exchanges — if the court rules that subsidies are restricted to state marketplaces only, the vast majority of the country will immediately lose access to Obamacare tax credits, pushing up the cost of coverage for millions of customers.

Some states are looking into ways to get around having to create their own exchange in case the Supreme Court doesn’t rule in the Obama administration’s favor, according to Bloomberg. Delaware is considering creating an entity to run their exchanges that will contract out to to actually enroll customers — functionally keeping the exact infrastructure of the current federally-run exchange.

The D.C. circuit said Wednesday that it would resume its review of Halbig after the Supreme Court issues its decision in the similar case. Oral arguments are expected early next year and a decision in the case will come next summer.

Follow Sarah on Twitter