Without those subsidies, opponents of the law argue, many people might not be able to buy insurance on their own, which could exempt them from mandates that require most Americans to carry health insurance or pay a fine.
The case was brought by a group of individuals and small businesses that argue that the Affordable Care Act only allows the government to give insurance subsidies, which come in the form of tax credits, to people in states that have set up their own health insurance marketplaces.
They say that Washington cannot dole out the subsidies to people in the 36 states who use a government exchange to shop for insurance.
People in those three-dozen states who won’t be able to afford insurance without the subsidies should be exempted from federal tax penalties for not having it, the plaintiffs say.
That would put them in the same category as people in states that are not expanding Medicaid. In those states, people who would otherwise be eligible for the expanded government health program will not be penalized for going without insurance.
District Judge Paul Friedman on Tuesday let the case go forward. He said he would rule on its merits by Feb. 15, 2014.
