Unhealthy sign: Federal courts differ on ACA insurance premiums

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Just when Americans thought it was safe to go outside without hearing that the Affordable Care Act was being threatened, two federal appeals courts handed down sharply differing opinions last week on a point of law that may succeed in dooming the legislation where Republicans in Congress have repeatedly failed.

The central point of contention is whether the Internal Revenue Service is permitted under the law to allow subsidies for insurance premiums to people living in the 36 states that use the federal insurance exchange rather than one of their own. Pennsylvania is one of those states, thanks to the Corbett administration, which has resisted the law since its inception.

On Tuesday, a panel of the U.S. Court of Appeals for the District of Columbia ruled 2-1 that the IRS could not authorize payments of premium subsidies in states that use the federal exchange. It said the health care law “plainly makes subsidies available only on exchanges available by states.”

No sooner had this legal rebuff been delivered than the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., unanimously sided with the IRS. It said the law is “ambiguous and subject to multiple interpretations.” The judges got that right. The wording is something of a drafting error, but the intention of the law is clear and supports a broader reading.

If the D.C. court reconvenes at full strength it may reverse itself, but the U.S. Supreme Court may decide to intervene. That is cause for concern, given its reputation for judicial activism of a conservative stripe. Millions of people could be affected — among them, 258,000 in Pennsylvania who receive subsidies.

Conservatives should be careful of what they wish for. The reason that Obamacare has faded from public debate is that after a rocky start it has been working well for millions. To have the law upset on a legal technicality would invite a bitter backlash.

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