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US court deals setback to Obamacare US courts issue conflicting rulings on Obamacare
(about 2 hours later)
A US appeals court has thrown out a federal regulation implementing key subsidies of President Barack Obama's signature healthcare law. Two US appeals courts have given conflicting rulings regarding a federal regulation implementing key subsidies of President Barack Obama's signature healthcare law.
It means that participants in health exchanges run by the federal government in 34 states are not eligible for help. The subsidies provide cash help to low and middle income earners buying health insurance on federal exchanges.
The ruling deals a setback to so-called Obamacare, jeopardising health insurance for four million low and middle-income people. The rulings are the latest in a series of legal challenges to key planks of President Obama's health care law.
The White House said it is confident in its legal position on subsidies. The decisions are open to appeal, so nothing will change immediately.
Several hours after the decision was handed down, a US appeals court for a different jurisdiction issued a ruling in a similar lawsuit upholding the subsidy programme.
The two contradictory decisions are open to multiple avenues of appeal, so nothing will change immediately.
"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," Senior Circuit Judge Raymond Randolph in his majority opinion ruling against the Obama administration's position."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," Senior Circuit Judge Raymond Randolph in his majority opinion ruling against the Obama administration's position.
Analysis - Anthony Zurcher, BBC News, Washington
There's no disputing the ruling in the District of Columbia Circuit case is a significant political development, as it gives validity and momentum to what had previously been considered to be a longshot conservative case against the implementation of the Affordable Care Act.
It is by no means the last word on the matter, however. The Obama administration will almost certainly request that the three-judge panel's ruling be reconsidered by the entire 11-judge DC Circuit Court this autumn.
Once the appellate court judges decide, the losing party will then ask the US Supreme Court to issue a final ruling, possibly allowing the conservative majority on the high court to strike another blow to Barack Obama's signature legislative achievement.
The US Court of Appeals for the District of Columbia ruled on Halbig v Burwell on Tuesday, one of four lawsuits currently challenging the legality of Internal Revenue Service (IRS)-funded subsidies under the Patient Protection and Affordable Care Act.The US Court of Appeals for the District of Columbia ruled on Halbig v Burwell on Tuesday, one of four lawsuits currently challenging the legality of Internal Revenue Service (IRS)-funded subsidies under the Patient Protection and Affordable Care Act.
'Disastrous consequences'
The court - considered the second highest in the nation behind the US Supreme Court - returned the case to a lower court with instructions to rule in favour to plaintiffs who had fought against the subsidies being offered in 36 states.The court - considered the second highest in the nation behind the US Supreme Court - returned the case to a lower court with instructions to rule in favour to plaintiffs who had fought against the subsidies being offered in 36 states.
The IRS is said to have dispensed billions of dollars in taxpayer subsidies through federal healthcare exchanges, or marketplaces.The IRS is said to have dispensed billions of dollars in taxpayer subsidies through federal healthcare exchanges, or marketplaces.
Plaintiffs in the lawsuit argued they were injured by the IRS actions because it triggered additional taxes for employers.Plaintiffs in the lawsuit argued they were injured by the IRS actions because it triggered additional taxes for employers.
The subsidies, or tax credits, have been made available to Americans with annual incomes up to 400% the federal poverty level.The subsidies, or tax credits, have been made available to Americans with annual incomes up to 400% the federal poverty level.
That works out to $94k (£55k) for a family of four.That works out to $94k (£55k) for a family of four.
In a dissenting opinion, Judge Harry Edwards calling the lawsuit a "not-so-veiled attempt to gut" the healthcare law, and "portends disastrous consequences".In a dissenting opinion, Judge Harry Edwards calling the lawsuit a "not-so-veiled attempt to gut" the healthcare law, and "portends disastrous consequences".
"You don't need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs, regardless of whether it was state officials or federal officials who were running the marketplace," said Josh Earnest, the White House press secretary. In a separate decision issued by the US Circuit Court of Appeals for Virginia on Tuesday, the three-judge panel ruled unanimously to uphold the Obamacare tax credits.
The US Appeals Court's ruling may impact on more than four million Americans who are currently eligible for subsidies to offset their healthcare costs. That court found the wording of the healthcare law was too ambiguous to restrict availability of such government funds.
Following the decisions, the White House said those covered under Obamacare will keep receiving financial aid as the legal issues are sorted.
White House spokesman Josh Earnest said the conflicting decisions would have "no practical effect" on healthcare tax credits in the interim.
But the US Court of Appeals for the District of Columbia's ruling may impact on more than four million Americans who are currently eligible for subsidies to offset their healthcare costs.
Should this mean large numbers of people be ineligible for health insurance, it would result in higher overall premiums for non-subsidised members.Should this mean large numbers of people be ineligible for health insurance, it would result in higher overall premiums for non-subsidised members.
The ruling is the latest blow for the embattled healthcare law, which last month saw the US Supreme Court overturn a crucial portion regarding contraception coverage. That ruling is the latest blow for the embattled healthcare law, which last month saw the US Supreme Court overturn a crucial portion regarding contraception coverage.