Justices to hear challenge to health law subsidies

WASHINGTON (AP) – The Supreme Court agreed Friday to hear a new challenge to President Barack Obama’s health care law.

The justices said they will decide whether the law authorizes subsidies that help millions of low- and middle-income people afford their health insurance premiums.

A federal appeals court upheld Internal Revenue Service regulations that allow health-insurance tax credits under the Affordable Care Act for consumers in all 50 states. Opponents argue that most of the subsidies are illegal.

The long-running political and legal campaign to overturn or limit the 2010 health overhaul will be making its second appearance at the Supreme Court.

The justices upheld the heart of the law in a 5-4 decision in 2012 in which Chief Justice John Roberts provided the decisive vote.

In the appeal accepted Friday, opponents of the subsidies argued that the court should resolve the issue now because it involves billions of dollars in public money.

The court rarely steps into a case when there is no disagreement among federal appellate courts, unless a law or regulation has been ruled invalid.

But at least four justices, needed to grant review, apparently agreed with the challengers that the issue is important enough to decide now.

In July, a Richmond, Virginia-based appeals court upheld Internal Revenue Service regulations that allow health-insurance tax credits under the Affordable Care Act for consumers in all 50 states.

On that same July day, a panel of appellate judges in Washington, District of Columbia, sided with the challengers in striking down the IRS regulations. The Washington court held that under the law, financial aid can be provided only in states that have set up their own insurance markets, known as exchanges.

The administration said in court papers that the federal government is running the exchanges in 34 states and that nearly 5 million people receive subsidies that allow them to purchase health insurance through those exchanges.

For those federal exchange consumers, the subsidies cover 76 percent of their premiums, on average. Customers now pay an average of $82 on total monthly premiums averaging $346. The federal subsidy of $264 a month makes up the difference.

But in October, the entire Washington appeals court voted to rehear the case and threw out the panel’s ruling, eliminating the so-called circuit split. The appeals argument has been scheduled for December 17, but that case now recedes in importance with the Supreme Court’s action to step in.