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Federal appeals court deals blow to health law

WASHINGTON (AP) — A federal appeals court has delivered a serious setback to President Barack Obama's health care law, potentially derailing subsidies for many low- and middle-income people who have bought policies. If upheld, the decision could mean premium increases for more than half of the 8 million Americans who purchased taxpayer-subsidized insurance under the law. It affects consumers who purchased their coverage through the federal insurance marketplace — or exchange— that serves 36 states. A three-judge panel in Washington ruled 2-1 that the law, as written, only allows insurance subsidies in states that have set up their own exchanges. That invalidated an Internal Revenue Service regulation that allowed subsidies in all 50 states.

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