One of the chief goals of the Affordable Care Act is to provide individuals with, on a net-cost basis, competitively priced health insurance. The law only achieves this favorable pricing by authorizing a federal tax subsidy for eligible lower income individuals who purchase health care from a state-run exchange.

The ACA statute uses language that would limit authority for federal subsidy payments, by only permitting them inside states that have affirmatively established their own exchanges. However, the Internal Revenue Service issued a regulation directing that the ACA federal tax credit is available to all financially eligible Americans, regardless of whether they purchase insurance on a state or federally run exchange.

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