This week, two courts issued conflicting rulings on Halbig v. Burwell, a case that may result in the elimination of health insurance subsidies for an estimated 5 million federal Exchange consumers.

On Tuesday, the U.S. Court of Appeals for the DC Circuit ruled against the federal government, stating that taxpayer-funded health insurance subsidies may not be granted for individuals in the federal Exchange. That same day, the U.S. Court of Appeals for the Fourth Circuit ruled on Halbig v. Burwell in favor of the government.

The fundamental issue in the case is whether an IRS rule allowing for the tax credit for individuals from federal Exchanges was an overreach of the actual ACA language. The DC Circuit ruled that the plain language allowed for subsidies for state Exchanges only, while the Fourth Circuit found that the ACA language was ambiguous and that the IRS regulation clarifying it did not overstep its authority.

Speaking in reference to the DC Circuit Court of Appeals decision against the government, House Ways and Means Committee Chairman Dave Camp (R-MI) said, “Today’s decision is a victory for the rule of law. The plain text of the law does not allow for tax credits in the federal Exchange. President Obama cannot ignore this fact just because he doesn’t like what a Democrat-controlled Congress did.”

The Justice Department has requested from the DC Circuit Court an en banc review. If the rehearing is not granted then DOJ will seek a stay on the ruling. The government can also appeal the case to the Supreme Court. If it’s struck down at the highest level it’s possible that the subsidy will not be available for consumers in more than 30 states. The federal government could also choose to view all of the Exchanges as state-based, and then continue to use the federal website to operate them.

The subsidy for health insurance is vital to the success of the Exchange system. Roughly 85 percent of 2014 Exchange consumers purchased health insurance with the assistance of a subsidy.

The issue of the tax credit was addressed a Ways and Means subcommittee hearing this week as well. Subcommittee Chairman Charles Boustany (R-LA) examined if the federal government has sufficient controls in place to verify identity and income for the tax credits. Concerns about fraud and abuse in the Exchange system have been previously brought up by House and Senate Republicans, especially regarding the dispersal of the tax credit.

Tax and health insurance practitioners indicate it could be more than a year until this issue is resolved.