RENEE MONTAGNE, HOST:
In what could be a major blow to the Affordable Care Act, a Washington, D.C. appeals court struck down the way millions of people buy health insurance. It was a 2-to-1 decision in the U.S. Court of Appeals for the District of Columbia. The court overturned the law subsidies for people in states that use the federal health insurance exchanges. Julie Rovner of Kaiser Health News joins us to talk about the ruling. Also with us in the studio is NPR's legal affairs correspondent Nina Totenberg. Welcome to you both.
JULIE ROVNER: Nice to be here.
NINA TOTENBERG, BYLINE: Nice to be here.
MONTAGNE: Nina, I'm going to start with you. The judges that - the judges said that under the health law, people in the states that rely on the federal government exchanges are not eligible for tax credits or subsidies to buy health insurance. And the key word here is federal, right?
TOTENBERG: Right. Well, this is one of those situations where the law is a bit contradictory within. So one section of the law says that - authorizes tax credits and cost-sharing subsidies for the purchase of qualifying health insurance plans that are purchased - that are instate exchanges. And the court said that these are not state exchanges because they're run by the federal government now. These are - there are 36 states that didn't want to participant in this at all and so the - under this law, a different section of the law - the federal government then takes over. If we were in a normal world, once we realized that there was this kind of conflict, we might have gone back to Congress and made drafting changes. But we're not in a normal world.
MONTAGNE: So, Julie, tell us how big of a deal this is for the law.
ROVNER: Well, potentially, it's a very big deal. Avalere Health just did a study last week that said that this could impact 5 million people who've already purchased coverage in the federal exchanges. And they would see an increase of 76 percent in their premiums because most people in the exchanges are getting subsidies and most people who are getting subsidies are getting subsidies that subsidize a very large portion of their premiums. So therefore, if you were to make the subsidies go away in the 36 states where the federal government is running the exchange, it would effect a lot of people to a very large degree.
MONTAGNE: Well, let me get this clear - will all of them lose their subsidies?
TOTENBERG: Well, they won't right away. They certainly won't right away because this is the second step in a - what promises to be at least, I think, a year-long - minimally - a year long legal struggle. The district court here upheld the way the ACA is being operated now, sided with the administration. Now we have a three-judge court that rules 2-to-1 against the administration's interpretation of the law. Almost certainly the administration will appeal for a - to the full court, all of the judges, the active judges on the court. And interestingly, two of the judges who participated in this case are not active judges, they're seniors status judges. So they won't be part of the en banc full court hearing. And this issue is being decided in other courts, in other places in the country. So you're looking at sort of the fight over the mandate redux. This time it's the fight over federal state exchange language instead of the mandate.
MONTAGNE: Which if it's redux, could this end up at the Supreme Court?
TOTENBERG: Oh, it will end up at the Supreme Court, I suspect. Don't you think, Julie?
ROVNER: Well, I mean, there is a question - everybody assumes that this will. And the Justice Department has already said this morning that they will appeal to the full court. The full court, the active judges on this particular appeals court are split 7-4 Democratic, so one would assume that they would probably go with the government on this. We're waiting to hear in the 4th circuit in Virginia. Judging from the oral arguments, people are assuming that that's also going to go for the government. So the question is whether the Supreme Court would have to take this because by the end of it, there might not be any split in the circuits. Everybody may have ultimately ruled that, no, Congress did intend to allow subsidies in the federal and state exchanges. So then the Supreme Court would have the option of whether or not they wanted to take it.
TOTENBERG: And this is a bit in the weeds, but if - when it gets to the Supreme Court, if there isn't a split, they can still take it. But it takes four votes to do that. Now, therefore, conservatives actually - on the court who one might expect would do that, but not necessarily. They might not want to get involved in this yet again. They might not want to put the court in the middle of a huge political fight that they don't want to get into.
MONTAGNE: Now, we just have a few more seconds. I'm going to put one thing to Julie - about 30 seconds here. It seems like the insurance companies - what happens to the Affordable Care Act affects insurance companies, which might affect us or everybody else. Where do they stand in all of this potentially?
ROVNER: This would be untenable for the insurance companies because, remember, they've not struck down the portions of the law that require them to basically take everybody, including sick people and - you know, without discrimination. And obviously you'd have a lot of people who could no longer afford their premiums. So you would basically have an individual mandate that people can't - now can't afford the premiums, you'd have the insurance companies on the hook. It is intended to - this lawsuit is intended to - and it would - basically blow up the entire law.
MONTAGNE: Well, thank you both very much for joining us. That was Julie Rovner of Kaiser Health News. And of course NPR's legal affairs correspondent Nina Totenberg. Thanks, both of you.
ROVNER: Thank you.
TOTENBERG: Thank you. Transcript provided by NPR, Copyright NPR.