Source: http://insurancenewsnet.com – Originally posted by Kimberly Atkins of the Boston Herald.

Aug. 03–The legal battle over Obamacare federal subsidies could land before the nation’s top court as soon as next year after challengers asked the U.S. Supreme Court to take up the case.

If the high court grants the request and ultimately rules that the Obama administration lacked authority under the law to authorize subsidies for individuals who purchase health care through the federal exchange rather than state-created exchanges, it would gut a crucial source of funding for the law and severely threaten its viability.

The Supreme Court petition, filed late Thursday, comes just more than a week after federal appellate courts in Virginia and Washington, D.C., issued conflicting opinions as to whether the text of the law, which allows individuals to qualify for subsidies if they purchase insurance on exchanges “established by the state,” applies to those in the 36 states that either refused to set up an exchange or for some other reason require residents to go to the federal exchange to enroll.

The Virginia plaintiffs, who claim that they would have qualified for the unaffordability exemption from the law requiring them to purchase health care but for the existence of the federal exchange subsidy, went directly to the Supreme Court instead of asking a full panel of the Virginia federal appellate court to rehear that case “because it’s important to get a resolution as soon as possible,” said Sam Kazman, general counsel at the Washington-based Competitive Enterprise Institute, which coordinated and funded the challenges to the federal subsidy.

Kazman said the case, one of several legal challenges to various provisions of the law that was largely upheld by the U.S. Supreme Court in 2012, was legal and not political.

“Once you get agencies going beyond the implementation of the law to actually rewriting it, one, it spells trouble and two, it’s unconstitutional,” Kazman said.

The Justice Department declined Friday to seek immediate Supreme Court review of the D.C. federal court that struck down the administration’s interpretation of the law the same day the Virginia court upheld it. Instead, it asked a full panel of the D.C. Circuit to review the three-judge ruling.