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Cover Oregon board members, from right, Laura Cali, Elizabeth Baxter and Dr. George Brown, listen to a staff presentation during a board meeting in March.
(The Associated Press)
Conflicting federal appeals court rulings over whether the federal health insurance exchange can issue premium tax credits won't have any effect in Oregon over the short term.
The long-term outcome may have to wait for a U.S. Supreme Court ruling, and potentially won't even be settled then. That's because Oregon's plan to use the federal exchange in 2015, while keeping some functions under state control, may fall into a legal gray area, experts said Tuesday.
At issue is whether all states, including those using the federal exchange, can issue reduced premiums to people with qualifying incomes under the 2010 Affordable Care Act. About 70,000 Oregonians received the subsidies this year.
As written, the law reserves that power to states that built their own exchange, such as Oregon attempted to last year. But the federal government issued regulations that extend the authority to all states, not just those who built their own exchange.
On Tuesday, a panel of the Washington, D.C., federal appeals court voted 2-1 to side with plaintiffs seeking to remove the subsidies in states using the federal exchange. But within a couple of hours, a federal appeals court in Virginia took the opposite stance in a similar case.
But even if the Supreme Court strikes down subsidized premiums in more than 30 federal exchange states, Cover Oregon officials say Oregonians won't be affected. That's because when the state hooks up to the federal exchange in 2015 for enrolling people in private plans, federal regulators will consider Cover Oregon a "supported state-based marketplace," meaning not a full-blown federally run one.
Lewis & Clark Law School professor Erin Ryan, an expert on federalism who's been tracking challenges to the Affordable Care Act, agrees with the Obama administration's legal defense – that the law's intent should override any wording questions. She said Cover Oregon's legal stance also "makes sense to me," saying it would be a "tall order" to call Cover Oregon's plans a fully federal exchange.
Bruce Howell, a Willamette University College of Law visiting professor and health-care lawyer, is not so sure.
He thinks the challenge to the subsidies could go either way. Where Oregon lands could depend on how broadly the Supreme Court words its decision. A second ruling might be required, he said, to determine where Oregon stands.
"I'm constantly surprised by how the court has come down" on the law, said the Schwabe, Williamson & Wyatt partner. "I don't think until the court has ruled that you can make an intelligent guess about what is going to happen."
-- Nick Budnick