The full U.S. Appeals Court will rehear the case, Halbig v. Burwell, on Dec. 17. | John Shinkle/POLITICO Court to rehear Obamacare case

A lawsuit that challenges the core Obamacare health insurance subsidies will get another appeals court hearing in December.

The full U.S. Appeals Court for the District of Columbia announced Thursday it will rehear the case, Halbig v. Burwell, on Dec. 17. A three-judge panel of that court in July dealt a major blow to the Affordable Care Act by ruling 2-1 that the subsidies can be available only in state-run exchanges, not through the federal HealthCare.gov, which serves 36 states that couldn’t or wouldn’t set up their own Obamacare marketplaces.


A few hours later that same day, a separate U.S. appeals court in Virginia ruled precisely the opposite: that the subsidies should be available to anybody who is eligible, no matter which kind of exchange their state relies on. The plaintiffs in that case, King v. Burwell, have already asked the Supreme Court to take it up without waiting for further action in the lower courts

Millions of people are getting subsidies, which come in the form of a tax credit, to make health insurance more affordable. None of the credits was cut off, though, pending more legal battles over one of the key provisions of the health care law’s massive coverage expansion.

The decision to have a full, or en banc, hearing vacates the earlier ruling by the D.C. court.

Critics of the health care law, including the plaintiffs in these cases, have argued that a specific provision in the law restricts the subsidies to the state-based system. The White House has strenuously argued that the intent of the full law makes clear that the federal exchanges were designed to be a backup for the states, including the subsidies.

The D.C. court earlier relied on a specific phrase in the law referring to state exchanges. The Virginia court noted the drafting ambiguities but said the IRS, which administers the subsidies, had the right to interpret the full statute more broadly.

The legal fights are not likely to be settled before the second open enrollment season begins on Nov. 15. The administration hopes millions more people sign up for coverage. Many would be eligible for subsidies.