The U.S. Supreme Court has agreed to hear the case of King v. Burwell, a lawsuit challenging the legality of subsidies under the Patient Protection and Affordable Care Act.
The PPACA states tax subsidies for health insurance are to be provided "through an exchange established by the state." Based on the text of the law, lawsuits were filed challenging an IRS regulation that allows for subsidies in all states.
On July 22, a three-judge panel of the D.C. Circuit Court of Appeals ruled tax subsidies may not be provided in states that didn't establish their own exchanges.
However, just a few hours after the D.C. Circuit released its opinion, a three-judge panel from the Fourth U.S. Circuit Court of Appeals in Virginia unanimously held low- and middle-income Americans in all states can legally receive subsidies for health insurance under the PPACA, even if their state didn't have its own exchange.
Four Virginia residents seeking to block subsidies in the 36 states that didn't establish their own exchanges filed an appeal of the Fourth Circuit case, which has now made its way in front of the Supreme Court.
If the subsidies are blocked, it could have a detrimental effect on the insurance markets and the healthcare industry, as millions of people would no longer be able to afford health insurance.
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