Obamacare was just dealt a major loss in court.
The U.S. Court of Appeals for the D.C. Circuit ruled Tuesday that more than half the country shouldn't be receiving tax subsidies under Obamacare—a ruling that could cripple the health care law if it's ultimately upheld.
The 2-1 decision in Halbig v. Sebelius is the first victory, in any court, for a legal challenge that says the tax subsidies should be available only in states that set up their own insurance exchanges.
Just a few hours later, a three-judge panel of the 4th Circuit Court of Appeals ruled the opposite way in King v. Burwell, rejecting a similar lawsuit that aimed to block the very same insurance subsidies.
The health care law specifically authorizes subsidies in "an exchange established by the state," and the plaintiffs in both cases said the administration violated the law by also extending subsidies to the 36 states using the federal system. They said Congress meant for the tax credits to serve as an incentive for states to establish their own exchanges.
Defenders of the health care law said that reading of the Affordable Care Act is too narrow, and that Congress clearly intended for the financial assistance to be provided equally on all exchanges.