(Bloomberg) — President Barack Obama’s health care overhaul suffered a potentially crippling blow as a U.S. appeals court ruled the government can’t give financial assistance to anyone buying coverage on the insurance marketplace run by federal authorities.
The decision, if it withstands appeals, may deprive more than half the people who signed up for Obamacare tax credits they need to buy a health plan.
The way the Affordable Care Act is written makes clear that the subsidy is available only to people who bought plans on state-run exchanges, a three-judge panel in Washington ruled today.
Only 14 states have opted to set up their own marketplaces, making delivery of tax credits via the federal exchange crucial to meeting Obamacare’s goal of broadening health-care coverage in the U.S.
“A very large share of people need the subsidies,” said Robert Blendon, a professor of health policy at the Harvard School of Public Health in Boston. If the ruling isn’t overturned, “it basically would significantly cripple the law,” Blendon said in an interview before the ruling.