SC healthcare subsidies could be deeply affected by new court battle

Published: Jul. 22, 2014 at 10:53 PM EDT|Updated: Aug. 1, 2014 at 3:48 PM EDT
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COLUMBIA, SC (WIS) - A pair of dueling court rulings released hours of one another plainly show the long, protracted battle over the nations still-infant healthcare law is long from over.

A three-judge panel ruled Tuesday that the 36 states that opted to not create state-run health insurance exchanges under the federal healthcare act will not be able to give subsidies to lower and middle-class citizens who signed up for health insurance.

Subsidies and tax credits allow insurance customers to only pay a portion of the full cost of their healthcare This was first put into action by the Internal Revenue Service.

The U.S. Court of Appeals for the D.C. Circuit ruling means individuals cannot use tax credits or subsidies to buy health insurance on federally run exchanges, effectively dealing a haymaker to the already controversial law.

"If you can't get those tax credits, you know," Lee Patterson said, "next year if you had insurance, you might not be able to afford it again."

The divided panel said those cost-sharing subsidies can be used only through state-run health exchanges, not the federal exchanges.

Meanwhile, another ruling released later in the day by the U.S. Court of Appeals for the Fourth Circuit came to the completely opposite conclusion with the three-judge panel unanimously ruling in favor of the law.

Both rulings have kept Patterson, who helps South Carolinians find health insurance, scrambling for answers.

"When it first came down," Patterson said, "there was a lot of confusion and what it would mean for our customers."

South Carolina was one of the 36 states who decided against setting up their own exchange under the Affordable Care Act.

State leaders, including Gov. Nikki Haley, have consistently pushed for state solutions that would address healthcare system shortfalls without signing onto the ACA.

Haley took to Facebook to deliver the news to her followers, saying the D.C. court's ruling was a "huge blow" to Obamacare.

"The way I see it, this allows the Supreme Court a redo," said Haley. "We can only hope!"

The U.S. Supreme Court initially upheld large parts of the law back in 2012 in a narrow 5-4 result.

South Carolina Attorney General Alan Wilson, who was one of seven attorneys general who filed a brief against the healthcare law, also applauded the D.C. court's ruling in a statement.

"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," said Wilson.

At last check, over 118,000 South Carolinians had signed up for healthcare using the federal exchanges with most of them eligible to receive federal subsidies.

The federal government plans to appeal the decision.

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