Decision Looms In Lawsuit That May Actually Crush Obamacare

SAHIL KAPUR – JULY 2, 2014, 1:54 PM EDT

Obamacare was left mostly unharmed this week despite the fact that the Supreme Court ruled against its contraception mandate. But a far greater threat to the law is alive and well a few blocks away in Washington, D.C.

Any day now, a three-judge panel on the D.C. Circuit Court of Appeals is expected to rule in Halbig v. Burwell, an expansive challenge that goes directly after federal insurance subsidies. An unfavorable outcome stands to cripple a core component of Obamacare, without which the law may not be able to survive. Two of the judges, both Republican appointees, expressed varying degrees of sympathy for the challengers' case.

"Of all the challenges since the individual mandate, this is the one that presents the most mortal threat to the act," Jonathan Turley, a professor at George Washington University Law School, told TPM.

At issue is whether the statute permits the federal exchange (which serves residents of 34 states which opted not to build their own) to dole out premium tax credits. Without the subsidies, which are benefiting millions of lower-income Americans, the individual mandate is unworkable because many people won't be able to afford insurance. And without the mandate, the coverage guarantee for preexisting conditions threatens to send costs soaring and destabilize the health care market.

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