(The Daily Caller) -- A second federal court ruled Tuesday that Obamacare subsidies in federal exchanges are in fact legal, just hours after the D.C. Circuit Court ruled just the opposite.
The Fourth Circuit Court of Appeals ruled Tuesday that the IRS action to hand out subsidies in the federal exchange doesn’t violate the law; the U.S. District Court of Appeals ruled earlier in the day that the federal exchange subsidies are illegal.
(CNBC) -- In a dramatic split decision, two federal appeals panels disagreed Tuesday on the legality of Obamacare subsidies that gave billions of dollars to help 4.7 million people buy insurance on HealthCare.gov.
A panel of the appeals court that covers Washington, D.C., ruled 2-1 that the subsidies were and are illegal if issued through that federal exchange, as opposed to one set up by a state.
But about two hours later, a Fourth U.S. Circuit Court of Appeals panel ruled 3-0 in another case that the subsidies are legal for people who buy plans on HealthCare.gov, which the federal government operates in 36 states.
The two decisions can be read here.
The circuit split could mean the cases will soon land before the U.S. Supreme Court. For now, the subsidies remain in effect.
The stakes are immense, not least because of the value of the taxpayer-funded subsidies to Obamacare enrollees in two-thirds of the US.
The subsidies are also the linchpin to Obamacare’s two mandates.
One mandate now requires people obtain affordable health insurance or pay a fine.The other, beginning in 2015, will require mid- to large-sized employers to offer such insurance to workers or pay a tax penalty.
If the subsidies aren’t legal in HealthCare.gov-served states, the employer mandate would be eliminated in those states and the individual mandate would be effectively crippled.