WASHINGTON Foes of President Barack Obama's healthcare law lost a bid on Tuesday to put an immediate stop to a key part of the law - the insurance subsidies in the 34 U.S. states that declined to establish their own online marketplaces.
At a court hearing, U.S. District Judge Paul Friedman in Washington, D.C., declined to grant a preliminary injunction sought by a group of individuals and small businesses that in a lawsuit call the subsidies unlawful.
Friedman ruled their lawsuit could move forward and said he would rule on its overall merits by mid-February, rejecting an argument from the Obama administration that the suit was too speculative to be considered.
The latest round of legal challenges to the Affordable Care Act, also known as "Obamacare," focuses on whether the 2010 law allows for subsidies in all states or only in states that have set up exchanges.
Only 16 states and the District of Columbia chose to set up the online marketplaces where people without private health insurance can shop for it, forcing the federal government to create them in the remaining states.
Subsidies, in the form of tax credits, are available to people with annual incomes of up to 400 percent of the federal poverty level, or $94,200 for a family of four. The Obama administration views the subsidies as essential if the law is going to work, because otherwise many people could not afford private insurance.
The suit was brought by a mix of individuals and businesses from Texas, Kansas, Missouri, Tennessee, West Virginia and Virginia. The plaintiffs argue the subsidies are unlawful and impose a burden by forcing them to purchase the insurance or else pay a penalty.