obamacare affordable care act health insurance subsidies What made policies through the Affordable Care Act, well, affordable, were federal subsidies that have now been ruled illegal by an appeals court.
Credit: Reuters

This morning, a federal appeals court threw out an IRS regulation that implements subsidies for low-income Americans who bought insurance through Obamacare.

These Affordable Care Act subsidies, which the law treats as tax credits, are vital to President Barack Obama's healthcare overhaul to keep the plans affordable.


The U.S. Court of Appeals for the District of Columbia Circuit accepted one of the main legal challenges to the policy by conservatives opposed to an expansion of the federal government.A three-judge panel returned the case to a lower court with instructions to rule in favor of appellants who had sued to overturn the rule.

The ruling has the potential to cripple the implementation of the law by making health insurance unaffordable for many people.

If the Obama administration appeals, the case could yet end up before the U.S. Supreme Court.

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