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Federal Court Rules Obamacare Subsidies Are Legal

2:04 PM, Jul 22, 2014 • By JOHN MCCORMACK
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Earlier today, a panel of federal judges in the District of Columbia ruled 2-1 that the plain text of Obamacare requires states to set up their own health care exchanges in order for their residents to be eligible for Obamacare subsidies. Thus, the court ruled, the subsidies provided and tax penalties imposed in 36 states that didn't set up their own exchanges were illegal.

But hours later, the 4th Circuit Court of Appeals ruled in a separate case that the subsidies were permissible:

[W]e find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion. We thus affirm the judgment of the district court.

The federal government is seeking to appeal the D.C. court panel's ruling before the entire D.C. circuit court of appeals, which has been recently stacked with Obama appointees. Regardless of how the D.C. court rules, the case may end up before the Supreme Court.

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