By Chris Stigall

PHILADELPHIA (CBS) – Chris Stigall spoke with William Jacobsen from the Cornell University Law School about two conflicting rulings by federal appeals courts regarding health insurance subsidies under the Affordable Care Act. The first decision said the IRS could not offer subsidies to anyone in a state that did not establish its own healthcare exchange, while the second ruling upheld the legality of the subsidies as currently in place.

Jacobson said the two courts allowed for different interpretations of the healthcare law.

“Both sets of judges found that the language of Obamacare really provided that you only get these tax credits if you signed up on a state exchange. In the one that went the Administration’s way, they said ‘well, we see that language but there’s a possible other reading here and when there’s a possible other reading here, we’ll defer to the administrative agency.’ These are not frivolous arguments. Two panels of federal judges agreed that the language is pretty clear but one of them wanted to say, ‘Well, maybe it’s a little bit ambiguous.’”

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He believes the Affordable Care Act will be untenable if the government has to stop offering the subsidies.

“The only way most people can afford the very expensive Obamacare insurance is if the government gives them money to do it, and the way the government is going to give them the money is through a tax credit. So you have a situation where people are forced into this system, they’re forced to by the very expensive insurance, but the only way they can afford it is if the government, essentially, gives them money. If that second piece falls away then you’ve got people have been forced into a system that they don’t necessarily want to be in, but they’re forced to, but are not going to get the subsidy from the federal government, so the whole Obamacare system literally will collapse if the government is not able to prop it up through subsidies to people to buy the insurance.”

Jacobson predicted the Supreme Court will eventually have to make sense of the competing rulings but said there is no way to predict how the Court will rule.

“I think it’s 50/50. I think you could flip a coin. If John Roberts wants to bend over backwards to salvage this law, there probably are ways for him to do it. The question is, is he simply going to read the statute and see that it says what it says or is he going to do what the second court here did and say, ‘Yes, we see that language but we’re going to try to find an ambiguity and use that ambiguity to say the IRS can do what it wants.’ I’d say just flip a coin and I think anybody that would try to predict is probably foolish.”


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