Move over, Halbig. The David King decision is here, too. (AP photo/J. Scott Applewhite)

A three-judge panel at the 4th U.S. Circuit Court of Appeals today ruled that the Internal Revenue Service (IRS) can provide premium subsidies for people who use the public exchanges run by the federal government.

The court panel collided with colleagues at the D.C. Circuit Court of Appeals, who came to the opposite conclusion in a 2-1 ruling on a similar case, Halbig et al. vs. Burwell et al. (Case Number 14-5018), earlier in the day.

The three 4th Circuit judges agreed that the Patient Protection and Affordable Care Act (PPACA) lets the government offer premium subsidies to consumers who buy qualified health plan (QHP) coverage through the public exchanges run by the U.S. Department of Health and Human Services (HHS) as well as those who buy QHPs through state-based exchanges.

In an opinion explaining the ruling, on David King, Douglas Hurt, Brenda Levy and Rose Luck vs. Sylvia Mathews Burwell et al. (Case number 14-1158), Circuit Judge Roger Gregory writes that it’s not clear how large a role Congress expected HHS-run exchanges to play.

“Nothing in the legislative history of the act provides compelling support for either side’s position,” Rogers writes. “Simply put, the statute is ambiguous and subject to at least two different interpretations.”

The act clearly gives the HHS the authority to resolve ambiguities in the exchange provisions, Rogers says.

“This clear delegation of authority to the IRS relieves us of any possible doubt regarding the propriety of relying on one agency’s interpretation of a single piece of a jointly-administered statute,” Rogers concludes.

In an opinion explaining the ruling on Halbig, D.C. Circuit Judge Thomas Griffith referred briefly to the legislation interpretation principles the U.S. Supreme Court established in 1984, in a ruling on Chevron U.S.A. Inc. vs Natural Resources Defense Council Inc. In the King opinion, Rogers relies more heavily on the principles set forth in Chevron. He says a court must start by looking at the plain meaning of a statute.

“If the statute is susceptible to multiple interpretations, the court then moves to Chevron’s second step and defers to the agency’s interpretation so long as it is based on a permissible construction of the statute,” Rogers writes.

One section of PPACA requires the HHS-run exchanges to report the kinds of premium tax credit eligibility and payment information that the state-based exchanges must report. This section implies that the drafters thought the HHS-run exchanges would offer PPACA premium tax credits, Rogers writes. 

But, overall, “we remain unpersuaded by either side,” Rogers writes. “Both parties offer reasonable arguments and counterarguments that make discerning Congress’s intent difficult.”

Members of Congress made speeches implying that all Americans, in all states, would have access to premium tax credits, but the legislative history is lacking, and members of Congress may have simply assumed that each state would establish its own exchange, Rogers says.

In the Chevron opinion, the Supreme Court ruled that, when statutory language is open to a variety of constructions, courts ought to defer to the views of the agencies implementing the statute, Rogers says. When the IRS developed regulations that let it offer PPACA subsidies to the users of the HHS-run exchanges, it seemed to be working to achieve the goals of PPACA’s drafters, Rogers says.

“Without only 16 state-run exchanges currently in place, the economic framework supporting the act would crumble if the credits were unavailable on federal exchanges,” Rogers says. “Furthermore, without an exception to the individual mandate, millions more Americans unable to purchase insurance without the credits would be forced to pay a penalty that Congress never envisioned imposing on them.”

See also: The potential to sink PPACA?

See also: Appeals court hears PPACA exchange subsidy challenge