The White House this week breathed a sigh of relief and conservatives simply sighed when hours after a D.C. federal appeals court ruled that the Internal Revenue Service exceeded its authority in providing tax credit subsidies in 34 states, another federal appellate court ruled the opposite. Within the next 18 months, both sides may have reason to rethink their initial instinct.
The Affordable Care Act grants subsidies to eligible individuals in states that establish a health exchange. It follows, both courts agreed, that without individuals eligible for subsidies in a state, employer penalties would effectively disappear, and the vast majority of individuals in a state would have no mandate to purchase coverage.
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