Obamacare Aid for Plan Buyers on U.S. Exchange Upheld by Court

Jul 22, 2014 12:24 pm ET

July 22 (Bloomberg) -- Financial aid to buy health insurance under President Barack Obama’s health-care overhaul can be provided to people using the federal as well as state-run marketplaces, a U.S. appeals court in Virginia ruled, hours after an appeals court in Washington reached the opposite conclusion.

The court, preserving a key element of the administration’s plan, turned aside the argument of Obamacare opponents that Patient Protection and Affordable Care Act only allows assistance for buyers on the state exchanges, who represent fewer than half of those who bought health-care coverage under the plan.

The ruling, which upholds a lower court, is the third decision affirming the Obama administration’s contention that tax credits are intended for customers of state and federal exchanges alike.

The court said while the language of the law is ambiguous and subject to multiple interpretations, the Internal Revenue Service is entitled to deference in interpreting it to write regulations implementing the program.

“We uphold the rule as a permissable excercise of the agency’s discretion,” the three judge panel said.