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Officials: N.H. residents won’t immediately lose health insurance tax credits because of court rulings

Last modified: 7/24/2014 12:04:50 AM
Nothing will immediately change for New Hampshire residents as a result of two conflicting court rulings on the availability of tax credits for people who purchased health insurance in states with federally managed exchanges, state and federal officials said.

At issue in the rulings issued yesterday is whether federal premium subsidies are available in both exchanges run by the states and those run by the federal government, New Hampshire Insurance Department counsel Jennifer Patterson said.

The federal government operates New Hampshire’s health insurance marketplace, and thus yesterday’s rulings would apply to tax credits here. But further action, likely through the courts, is needed before any changes to the availability of those tax credits would actually take effect.

Both of yesterday’s rulings said that the initial language of the Affordable Care Act didn’t clearly state that federal tax credits for health insurance coverage would extend beyond state-run exchanges. The rulings also acknowledge that the Internal Revenue Service later clarified that such credits were meant to be available through both state and federal exchanges.

But the U.S. Court of Appeals for the District of Columbia Circuit ruled that the so-called IRS Rule is not an adequate interpretation of the health care law’s intent, striking down the tax credits in states without their own exchanges. In its opinion, the court wrote that “by making tax credits available in the 36 states with federal Exchanges, the IRS Rule significantly increases the number of people who must purchase health insurance or face a penalty.”

Then, hours later, the 4th U.S. Circuit Court of Appeals in Virginia issued a conflicting ruling in a separate case. There, the court said existing IRS guidance that allows citizens to use federal subsidies in both state- and federally-run exchanges is “a permissible exercise of the agency’s discretion.”

Not ‘the last word’

For now, Patterson said New Hampshire residents who received tax credits to purchase health insurance won’t lose those subsidies – but the future availability of the tax credits will depend on how the cases proceed from here. Of the 40,262 people in New Hampshire who selected a plan through the 2014 marketplace, 77 percent (or about 31,000) were receiving financial assistance, according to the U.S. Department of Health and Human Services.

“In New Hampshire, the federal government operates the Health Insurance Marketplace, so if today’s decision by the D.C. Circuit Court of Appeals stands, New Hampshire consumers could eventually lose access to subsidies that have made health insurance affordable,” Patterson said in a statement. “However, today’s rulings are by no means the last word on this issue.”

Emily Pierce, a spokeswoman for the U.S. Department of Justice, affirmed in a statement that tax credits would remain available. The department is planning to challenge the D.C. appeals court’s ruling through a review by the full 11-member court, Pierce said. Yesterday’s ruling was decided by a three-judge panel. Patterson said the Insurance Department will continue to follow developments on this issue closely.

William Hinkle, press secretary for Gov. Maggie Hassan, also affirmed that the governor does not anticipate any immediate effects on those receiving tax credits in New Hampshire.

“Governor Hassan believes that the legislative intent of the Affordable Care Act is clear and that the ACA allows subsidies on both federal and state exchanges,” Hinkle said. “New Hampshire residents unfortunately face uncertainty about the availability of subsidies because of a law passed by the previous legislature that prohibited New Hampshire from establishing its own state-based exchange.”

‘Blow’ to law cheered

New Hampshire Republicans and other opponents of the ACA heralded the ruling from the D.C. appeals court as a sign of the health care law’s flaws.

Americans for Prosperity-New Hampshire Director Greg Moore, in a statement, said the D.C. appeals court’s ruling highlighted the “executive overreach” inherent in the federal government’s attempts to regulate health care.

U.S. Senate candidate Jim Rubens issued a statement describing the ruling as a “major blow to Obamacare” and an indicator that it should be repealed, and Scott Brown, also running for U.S. Senate, called the ruling a “devastating blow to the people of New Hampshire who have been misled into thinking all is well with their healthcare.”

State Rep. Marilinda Garcia, who is running for a seat in New Hampshire’s 2nd Congressional District, and Frank Guinta, who is running in New Hampshire’s 1st Congressional District, both pledged to replace the Affordable Care Act if elected.

State Rep. Bill O’Brien – who is running for re-election to the New Hampshire House and for his former spot as House speaker – called on Democrats to adopt reforms to the law that have been put forward.

“We should allow health insurance to be purchased across state lines, to eliminate costly and unnecessary policy mandates, to free providers to bid their services and consumers to know the costs of those services, and to remove artificial licensing and healthcare provider restrictions,” O’Brien said in a statement.

Gubernatorial candidate Andrew Hemingway also condemned Hassan’s support for the ACA and called on her to “put a pause button on Medicaid Expansion and any other part of Obamacare the state can control, until we know what this will look like in another year.”

Other voices

Lisa Kaplan Howe, the policy director for New Hampshire Voices for Health – which advocates for affordable health care access – said it’s important to keep in mind that the tax credits are issued through the IRS, and “assuming the state has a role in tax credits isn’t accurate.” The tax credits at issue in these cases are critical to allowing more people to afford health insurance, she said.

The New Hampshire Democratic Party and Granite State Progress, in turn, released statements condemning the officials who were celebrating the D.C. appeals court’s ruling.

“Some of the same politicians celebrating this ruling are the very ones who got us in this predicament to start. Bill O’Brien and Andrew Hemingway worked to block New Hampshire from creating and running its own health care exchange,” Granite State Progress Executive Director Zandra Rice Hawkins said in a statement. “Doing so . . . would have guarded us against this court decision.”

(Casey McDermott can be reached at 369-3306 or cmcdermott@cmonitor.com or on Twitter @caseymcdermott.)


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