Judge dismisses lawsuit against O-Care subsidies

A federal judge in Virginia dismissed a lawsuit arguing that ObamaCare subsidies are only legal in states that run their own insurance marketplaces under the healthcare law.

Tuesday's late-breaking decision represents another blow to the theory, pushed by opponents of the Affordable Care Act who say the law did not intend for federally run exchanges to distribute healthcare tax credits.


If accepted in court, this argument would dismantle much of the taxpayer assistance available under ObamaCare. The federal government is running exchanges in 34 states.

But so far, two district courts have ruled for, rather than against, subsidies in those marketplaces.

Judge James R. Spencer from the Eastern District of Virginia wrote Tuesday that the argument against the tax credits had a "certain common sense appeal" but falls apart based on a lack of legislative history.

"When statutory context is taken into account, Plaintiffs' position is revealed as implausible," Spencer wrote.

The decision follows congressional Democrats' move to join a parallel court battle over the validity of the tax credits.

Lawmakers including Senate Majority Leader Harry ReidHarry Mason ReidBottom line Voters need to feel the benefit, not just hear the message Schumer-McConnell dial down the debt ceiling drama MORE (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) filed an amicus brief Tuesday in Halbig v. Sebelius, which is now before an appellate court.