WASHINGTON — Judges on the U.S. Court of Appeals for the District of Columbia Circuit appeared split Tuesday on whether the Affordable Care Act allows federal subsidies in states with federally run health insurance exchanges — a legal challenge that threatens the very structure of the law.

WASHINGTON — Judges on the U.S. Court of Appeals for the District of Columbia Circuit appeared split Tuesday on whether the Affordable Care Act allows federal subsidies in states with federally run health insurance exchanges — a legal challenge that threatens the very structure of the law.


Opponents of the health-care law argue that the text of the statute authorizes only those people living in states with state-run exchanges to access insurance subsidies in the marketplaces, contrary to a 2012 IRS rule. Further, they say this was a design of the law — not a drafting error — meant to give states an incentive to set up their own insurance marketplaces.


During oral arguments in Halbig v. Sebelius, it appeared likely that there will be a split decision on the three-member panel, with two judges staking out opposing views on the subsidy question. Judge Harry Edwards, an appointee of President Jimmy Carter, accused the defendants of making a politically motivated attack on the law. Judge A. Raymond Randolph, an appointee of President George H.W. Bush, said the text of the law and legislative history clearly block subsidies from federally operated exchanges.


The subsidy question is central to the law’s survival. Fourteen states and the District of Columbia are running their own exchanges this year, while the Department of Health and Human Services is operating 36 state exchanges.


About 85 percent of those signing up for insurance in federally run exchanges have qualified for financial assistance to purchase coverage. Without those subsidies, the insurance would be less affordable, which could discourage healthier people from buying coverage. That, in turn, would limit diversity in the risk pool, driving up the cost of insurance to cover the higher number of less healthy people and creating what’s known as an insurance "death spiral."


Oral arguments aren’t always a reliable indicator of how a judge will decide a case. But Randolph’s and Edwards’ leanings appeared clear, making Judge Thomas Griffith the panel’s apparent swing vote. Griffith, an appointee of President George W. Bush, was the only judge who appeared not to have made up his mind, and he challenged the Obama administration on some key points.


The plaintiffs challenging the IRS rule said the statute clearly refers to people accessing subsidies "established by the state" and makes no reference to the federal government providing subsidies. Griffith focused on that distinction, repeatedly questioning the administration’s attorney, Stuart Delery, on the language. Delery argued that a full reading of the law indicates that Congress intended for HHS to set up fully operating exchanges, complete with subsidies, if the states didn’t. But Griffith appeared skeptical about that point.


Delery also argued that the congressional debate on the law more than four years ago showed that Congress always meant for federally operated exchanges to provide subsidies. Michael Carvin, arguing for the plaintiffs, said the distinction between exchanges run by the states and those run by the federal government was clear at the time.


Congress "knew there were two kinds of exchanges," he said.


But Griffith, the apparent swing vote, appeared ready to ignore what happened during the debate in Congress.


"There doesn’t seem to be any clear legislative history here," he said. "If [Congress] didn’t legislate clearly enough, is it our job to fix the problem?" Griffith also questioned the administration’s argument that should it lose the case, the Internal Revenue Service rule would be invalidated only for the four Halbig plaintiffs.


It will probably be at least another couple of months before the appeals court issues its decision. If the administration loses, it could then request that the full circuit court hear the case.