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ObamaCare subsidies are legal after all, second appeals court rules

A federal appeals court on Tuesday upheld ObamaCare's subsidies — the same day another appeals court ruled against them.

In a unanimous ruling, the Fourth Circuit Court of Appeals ruled that the health care law permits the federal government to provide subsidies to people who purchase health insurance in every state. Plaintiffs had argued that a poorly-worded section of the law implied the government could only provide subsidies in states that opted to set up their own health care exchange programs, and not in states where the feds run those exchanges. The law specifically states that subsidies can go to people who buy coverage "through an Exchange established by the State," though the 4th Circuit said lawmakers clearly intended the law to be broader than that.

Here's the crux of the ruling:

However, when conducting statutory analysis, "a reviewing court should not confine itself to examining a particular statutory provision in isolation. Rather, [t]he meaning — or ambiguity — of certain words or phrases may only become evident when placed in context." With this in mind, the defendants' primary counterargument points... provide an equally plausible understanding of the statute, and one that...comports with the IRS's interpretation that credits are available nationwide. [PDF]

Earlier in the day, the D.C. Circuit Court of Appeals ruled that the letter of the law meant subsidies were null in more than half the states. That ruling — which the White House has said it will appeal — could have affected millions of Americans who depend on the subsidies to purchase affordable care, and potentially undermined the viability of the entire health care law.