Industry insiders say the effects of two contradictory court rulings Tuesday on the legality of subsidies under the Patient Protection and Affordable Care Act could have a long-term — and possibly disastrous — effect on the law — but they’re also not counting on it happening quite yet.

The often-controversial law suffered its latest blow Tuesday when a U.S. appeals court ruled the government can’t give financial assistance to anyone buying coverage on the exchanges run by federal government.

The lawsuit — Halbig v. Burwell — targets a May 2012 Internal Revenue Service rule that allows subsidies to be offered through the federal exchange.

The ruling is at odds with a separate appeals court decision in King v. Burwell — which came hours later — that the IRS had the discretion to issue subsidies given “ambiguity” in PPACA’s language.

The contradictory ruling means more confusion for consumers — and more guidance needed for those in the benefits business — just in time for the second open enrollment period under Obamacare, which begins Nov. 15. The two different rulings, industry insiders say, also leads to a very good possibility the issue will head to the Supreme Court.

But so far, most say, they aren’t expecting the rulings — especially in the Halbig v. Burwell case — to be the end all, be all. The Obama administration already indicated they would appeal the D.C. appeals court ruling.

Carrier group America’s Health Insurance Plans said carriers and brokers should continue to stay the course, and not jump to any premature conclusions or changes.

“These issues typically take months or longer to be fully resolved by the courts,” said AHIP spokesman Brendan Buck. “In the meantime, health plans remain focused on ensuring stability, affordability and accessibility for consumers.”

The National Association of Health Underwriters similarly said that though the ruling poses “a profound long-term impact, it causes no immediate market change.”

“While this decision could eventually have huge ramifications for the health reform law, it is very important to note that the ruling does not change anything regarding the distribution of subsidies or cost-sharing assistance, the operation of the federally facilitated exchanges or enforcement of the employer mandate for the time being,” said Jessica Waltman, NAHU’s senior vice president of government affairs. “In making its ruling, the D.C. Circuit Court made a very specific decision not to immediately block subsidies, acknowledging that their decision will be appealed right away.”

Given that the federal exchange will remain fully operational, NAHU told brokers and agents they should “continue to work with [clients] to obtain coverage in the marketplace.” In doing so, Waltman said, they should relay information to their clients that: tax credit subsidies and cost-sharing assistance in both the state and federally facilitated exchanges will continue to be distributed for the time being; current clients with subsidized coverage are unaffected by the ruling; the individual and employer mandates are still in place and open enrollment will continue as planned.

And though some have speculated the case ruling will mean consumers might even have to pay back the subsidies they already received, Waltman said that likely will not be the case.

“If the Supreme Court ultimately rules like the D.C. Circuit Court and strikes subsidies moving forward, based on current legal precedents, clients that currently have or will receive a subsidy in the future will likely not have to repay those subsidies retroactively, assuming that the individual was legally eligible for the subsidy at the time of receipt,” she said.

Still the fact that this doesn’t cause immediate changes in the marketplace didn’t stop others from speculating on what this may mean for the industry and for PPACA going forward.

Steve Wojcik, vice president of public policy at the National Business Group on Health, said the uncertainty on the ruling is both “a concern for part-time and full-time employees, retirees and family members of employees who qualify for subsidies, and for employers that were relying on the public exchanges for coverage for their employees.”

Wojcik also said he thinks the ruling will most likely be appealed, so “this is not the end of the story.”

state- and federal-based marketplaces Only 14 states — California, Colorado, Connecticut, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New York, Oregon, Rhode Island, Vermont, Washington — and the District of Columbia opted to create their own exchanges in time for the 2014 plan year, meaning that not allowing subsidies in the federal exchanges would have a huge impact on those consumers who rely on them for affordable coverage.

According to the Department of Health and Human Services, 5.4 million people selected a health plan on the federal exchange during 2014 enrollment (out of 8 million enrollees all told). And 85 percent of those consumers qualified for subsidies that reduced their premiums.

Health consulting firm Avalere Health last week pointed to the implications of finding subsidies illegal in the Halbig v. Burwell case, saying that nearly 5 million Americans would receive an average premium increase of 76 percent if the courts ultimately rule that consumers in the federal exchange cannot receive premium subsidies.

“The court case has major implications for future insurance coverage and access to care for millions of Americans,” said Caroline Pearson, vice president at Avalere Health. “Individuals in at least 25 states who remain in their current plans could see an average premium increase of over 70 percent.”

Instant Insights /

&lsquo;No immediate market change&rsquo; in subsidy court rulings

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‘No immediate market change’ in subsidy court rulings