The Affordable Care Act may be headed back to the U.S. Supreme Court after two conflicting court decisions were announced Tuesday.
While a federal appeals court in Virginia upheld tax subsidies for low- and middle-income people who buy insurance under the Obama administration's health care reform law, the U.S. Court of Appeals for the District of Columbia Circuit decided subsidies are available only for those who buy insurance on exchanges established by the states.
At stake are billions of federal dollars that consumers use to purchase insurance policies in the 36 states, including South Carolina, that opted into the federal exchange instead of creating state-based exchanges.
"This is a huge blow to Obamacare as we know it," Gov. Nikki Haley, an opponent of President Barack Obama's signature health care law, wrote on Facebook Tuesday. "The way I see it, this allows the Supreme Court a redo. We can only hope!"
Nothing will change immediately. South Carolina residents who are currently receiving subsidies to offset the cost of their insurance each month will continue to benefit from them. S.C. Department of Insurance Director Ray Farmer said in a prepared statement that he is reviewing both decisions and anticipates that the cases will be appealed.
"We do not anticipate any immediate impact on South Carolina," Farmer said. "We plan to monitor the situation closely."
Shelli Quenga, programs director for Palmetto Project, said the nonprofit group will keep assisting residents who need help enrolling in an Affordable Care Act policy.
"We are not really concerned with the ruling at this point," she said.
In South Carolina, about 95,000 residents purchased coverage through the federal marketplace. Nearly 90 percent qualified for a subsidy to offset the cost of their monthly premiums.
"The governors and legislatures in states that decided not to create their own exchanges do not have the best interest of their citizens at heart," said Tim Liszewski, a Columbia-based navigator who assisted residents during the Affordable Care Act enrollment period. "I think they're playing politics with people's health and that's unacceptable no matter what party you're in."
An analysis by Avalere Health shows that the cost of premiums could increase by 75 percent in South Carolina if customers here can't receive the federal subsidies.
"I don't know of anyone who bought a plan - and I'm one of those people - who thinks it's a bad thing," Liszewski said. "It's helped me afford insurance that I couldn't otherwise afford."
Tony Keck, director of the S.C. Department of Health and Human Services and a member of Haley's Cabinet, said the larger issue in these cases is the extent to which the Obama administration is allowed to interpret the law.
The majority opinion in the District of Columbia case concluded that the Affordable Care Act, as written, "unambiguously" restricts subsides to consumers in exchanges established by a state. That would invalidate an Internal Revenue Service regulation that tried to sort out confusing wording in the law by concluding that Congress intended for consumers in all 50 states to have subsidized coverage.
"The evidence doesn't show congressional intent one way or the other," said Keck, an influential member of the planning committee organized by Haley that decided in 2011 that South Carolina should not create its own exchange.
He stood by that decision on Tuesday, pointing out that "a large number of states that did create their own exchanges ran them into the ground."
Success varied among states that created their own exchanges. Some, including Kentucky, encountered relatively few snags during open enrollment, successfully signing up thousands of residents in health insurance policies. Other state exchanges, including Maryland and Oregon, were riddled with errors.
"There is an unintended consequence here. Many millions of people have received these subsidies now," he said. "Potentially, there's going to be huge political pressure (for states) to take over the exchanges if these subsidies that have already been delivered can't be continued."
South Carolina Attorney General Alan Wilson and several other state attorneys general asked the D.C. Court of Appeals to review the Washington-based case in February.
"Today's decision is an important victory for stalwarts of federalism and all who recognize the federal government must operate within the limits established by the Constitution," Wilson said in a prepared statement.
Meanwhile, advocates for the health care law argued that the decision from the federal appeals court in Virginia, which upheld the subsidies, carries more weight.
"We need to stop fighting over it and embrace the Affordable Care Act," said Sue Berkowitz, director of S.C. Appleseed Legal Justice Center in Columbia. "South Carolina has been fighting it every step of the way. That is just the wrong thing for the people in our state."
The Associated Press contributed to this report. Reach Lauren Sausser at 937-5598.
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