Fix, don’t gut, health-care law

Congress and the courts can’t allow a bad ruling to deny affordable health insurance to millions of Americans


Two federal appeals courts contradicted each other this week about whether Washington can subsidize the private health insurance that millions of Americans buy under the Affordable Care Act. Congress needs to clarify the health-care reform law, so that not even the most creative and determined Obamacare distorter can misrepresent its intent.

Instead of fixing the law, though, Republican lawmakers maintain their futile quest to repeal it. So the ambiguity will continue, to the detriment of poor and middle-income households that need assistance to pay for health coverage, and of other Americans who must help pay for the treatment of uninsured patients.

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A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled that consumers who buy insurance from federal exchanges created by the Affordable Care Act are not eligible for income-based tax credits that subsidize the cost of their premiums. Only insurance purchased from online marketplaces set up individually by 14 states and Washington, qualifies for the credits, ruled the two GOP-appointed judges who formed the panel’s majority.

Hours later, an appeals court panel in Richmond, Va., unanimously ruled just the opposite — that availability of the subsidies is not determined by where insurance is purchased. Although that decision is clearly in keeping with the intent of health reform, the judges conceded that the wording of the law is vague on the issue.

When the Affordable Care Act was passed in 2010, its Democratic authors kept an ambiguous reference to tax subsidies through “an exchange established by the state,” rather than risk a Senate GOP filibuster. But the Obama Administration made clear that any customer who qualified on the basis of income would be eligible for the insurance subsidies. Historically, courts defer to such legal interpretations by the executive branch, and should do so here.

If the D.C. circuit’s ruling stands, millions of Americans would face a hopeless choice between paying premiums they can’t afford or remaining uninsured. By 2016, a recent study projected, 7.3 million people will have subsidized insurance coverage from federal exchanges.

The full D.C. appellate court — and if necessary, the Supreme Court — should reverse the panel’s excessively narrow opinion. In the meantime, Congress could make clear that the tax credits provided by the Internal Revenue Service are equally available on the state and federal exchanges.

That’s the only way to achieve the Affordable Care Act’s goal of greatly broadening health-care coverage, and to justify the law’s mandate that individuals must obtain coverage — and employers must provide it — or pay a penalty. The law is meeting its objective of wider coverage.

Such a technical correction of the law’s language would require Republican leaders in the House and Senate, and their caucuses, to place reason ahead of ideology. Good luck with that.

The conflicting court rulings make clear the consequences of the partisan refusal by Gov. John Kasich and the Republican-controlled General Assembly to create an insurance exchange for Ohio, instead of defaulting to a federal exchange. This decision partially negates Mr. Kasich’s courageous expansion of Ohio’s Medicaid program under Obamacare, despite state lawmakers’ opposition.

The D.C. circuit’s ruling is wrong and worrisome, but need not and should not be the last word. Avoiding that outcome will require higher courts and Congress to do their jobs, rather than kill successful health-care reform by default.