Maine Health Care Advocates: Don't Panic Over Dueling Subsidy Rulings

Jul 22, 2014

Health care officials in Maine spent the day analyzing the potential impact of two, conflicting federal appeals court rulings on a key part of the Affordable Care Act.

One said that tax credits used to buy coverage under the law can only be given to residents of states that set up their own health insurance exchanges. But another argued that the Affordable Care Act's language is vague and that the government is free to offer subsidies in all states.  

In Maine, health care consumers are wondering how the decisions will affect them. Maine is one of 27 states that opted out of the Affordable Care Act and declined to set up its own health insurance exchange. Most of these states have Republican governors, like Paul LePage, who oppose the ACA.

Consumers in Maine who want to buy coverage under the law get federal subsidies and use the federal exchange - - to shop for plans. "People who are currently getting tax credits that help them afford health insurance coverage should not panic," says Emily Brostek, associate director at Consumers for Affordable Health Care.

In Maine, 44,000 people signed up for coverage under the Affordable Care Act during the first enrollment period, which ended March 31. In one of the decisions issued today, the D.C. Circuit Court of Appeals, in a 2 to 1 ruling, said that only states with their own health exchanges could get subsidies from the federal government to help middle- and low-income people buy coverage.

But Bostick says the D.C. decision is based on a very narrow reading of the law, "which we don't believe is likely to be agreed upon by other courts."

Indeed, shortly after Emily Brostek spoke these words, a second ruling came out - this one from a federal appeals court in Richmond, Virginia. It it, a three-judge panel ruled unanimously that the Obama administration could, in fact, offer subsidies in states using the federal health care exchange.

"When you reform the largest sector of the American economy, which is the health care sector, and do that in comprehensive legislation, there are going to be areas in the law that are controversial and unclear," says Dr. Wendy Wolf, who runs the Maine Health Access Foundation. The organization runs enroll207, a project that connects consumers with navigators who can help them compare, shop for and enroll in plans under the Affordable Care Act.

"This will work its way through the courts. I would suspect it would probably go all the way to the Supreme Court," Wolf says. "It will create a lot of confusion for people who, I think, will have anxiety about losing coverage - and, in some instances, coverage they've first gotten after years and years of being shut out of the health insurance marketplace."

For now, though, no Mainers receiving coverage under the Affordable Care Act are in danger of losing the subsidies that help pay for their insurance.

The dueling court rulings, meantime, prompted all three candidates for governor to weigh in. Republican Paul LePage, the incumbent, called on Congress to fix the Affordable Care Act and said the court rulings just prove what a disaster the law is. Democratic gubernatorial candidate Mike Michaud, Maine's 2nd District Congressman, said he wants to work with colleagues in Washington to fix the law. And independent Eliot Cutler says the whole mess could have been avoided if LePage had simply agreed to a state health care exchange in the first place.