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Two Hours After A Court Strikes Down Obamacare Subsidies, Another Appeals Court Upholds Them (Click here to read more)

By Ian Millhiser July 22, 2014 at 1:20 pm Updated: July 22, 2014 at 1:29 pm

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CREDIT: AP

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A little after 10am Tuesday morning, two Republican judges on the United States Court of Appeals for the District of Columbia Circuit ordered much of the Affordable Care Act defunded. Just two hours later, another federal appeals court, the Fourth Circuit, issued a unanimous opinion upholding the same subsidies that were struck down in the DC Circuit’s order.

As we explained this morning, both cases hinge upon a glorified typo in the Affordable Care Act. Obamacare gives states the option to run a health insurance exchange selling coverage to their residents, or they may elect to have the federal government run this exchange. If read in isolation, one line of the Affordable Care Act suggests that only “an Exchange established by the State” can offer subsidies to help people pay for health insurance in the exchange. The DC Circuit’s opinion relied on that line to conclude that federally-run exchange subsidies must be defunded.
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Yet, as the Supreme Court has made clear — and as the Fourth Circuit reiterates in its opinion — a federal law should not be interpreted by reading a single line out of context. Rather, “a reviewing court should not confine itself to examining a particular statutory provision in isolation” as the “meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.” A full explanation of why the DC Circuit misread the law and ignored other key provisions of the Affordable Care Act can be read here.
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