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U.S. judge rejects legal challenge to ACA subsidies

Jan. 15, 2014 at 2:57 PM   |   Comments

WASHINGTON, Jan. 15 (UPI) -- A U.S. judge in Washington Wednesday upheld a portion of the Affordable Care Act providing insurance premium subsidies in states without their own marketplaces.

District Court Judge Paul Friedman, ruling in a lawsuit brought by the Cato Institute, a Libertarian think tank in Washington, rejected the argument that Congress intended for the subsidies to be restricted to people enrolled for coverage through state marketplaces, The Hill reported.

The lawsuit was intended to block premium tax credits in 36 states where the federal government operates marketplaces because state officials declined to open their own exchanges. The suit's backers were trying to use it to undercut the ACA after the U.S. Supreme Court ruled in 2012 the law, including the individual mandate, is constitutional, The Hill said.

Friedman concluded the subsidies -- designed to provide help people get coverage if they are not poor enough to qualify for Medicaid -- should be available throughout the United States.

"The plain text of the statute, the statutory structure, and the statutory purpose make clear that Congress intended to make premium tax credits available on both state-run and federally facilitated exchanges," he wrote.

Families USA Executive Director Ron Pollack told reporters on a conference call the lawsuit constituted "probably the most significant existential threat to the Affordable Care Act. All the other lawsuits that have been filed really don't go to the heart of the ACA, and this one would have."

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