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Courts split on Obamacare subsidies

A federal appeals court last week dealt a stunning blow to the Affordable Care Act, ruling that the billions of dollars in government subsidies that have enabled millions of Americans to buy health insurance on the federal online marketplace at HealthCare.gov are illegal.

But while the divided court panel in Washington was throwing out the Obamacare subsidies at HealthCare.gov, in Richmond, Va., another appeals court panel was unanimously reaching the opposite conclusion on July 22, ruling that the Internal Revenue Service correctly interpreted the will of Congress when it issued regulations allowing consumers in all 50 states to purchase subsidized coverage.

The White House immediately declared that policyholders will keep getting financial aid as the administration sorts out the legal implications.

Spokesman Josh Earnest said the adverse decision in Washington would have “no practical impact” on tax credits as the case works its way through the courts.

New Jersey is among 36 states that opted to have their residents sign up for Obamacare on HealthCare.gov instead of creating their own state-run exchange. According to the government, more than 162,000 New Jerseyans bought policies there for 2014, the first year of the ACA – and the maj ority received subsidies to make their coverage affordable.

“New Jersey consumers, including those receiving health insurance subsidies, should not anticipate any immediate changes to their health insurance coverage,” said Ward Sanders, president of the New Jersey Association of Health Plans, the trade group for the state’s health insurers. - Beth Fitzgerald