Maine is one of 36 states where residents could lose subsidies to purchase health insurance through the Affordable Care Act if a ruling by a Washington, D.C. appeals court panel last week is upheld.

The three-judge panel ruled that because of the way the federal law is worded, the insurance subsidies apply to only state-run marketplaces. Maine is among the states that allowed the federal government to operate its marketplace through healthcare.gov, where families and individuals can shop for health plans and apply for subsidies to help pay for them. Fourteen states chose to run their own marketplaces.

Some states that could be affected by the ruling are now considering either creating state-run marketplaces or taking advantage of an administrative workaround to avoid losing the subsidies, according to news reports. Whether Maine will join those efforts isn’t clear – Gov. Paul LePage’s administration is taking a “wait-and-see” approach.

Some experts say the case could ultimately be appealed to the U.S. Supreme Court, others doubt the court would take the case. Other courts have ruled that the subsidies apply to both federal- and state-run marketplaces.

The rulings have no immediate effect – the Obama administration announced last week that all subsidies would remain in place for now.

What action Maine will take may depend on the outcome of the November gubernatorial election between LePage, Democratic U.S. Rep. Mike Michaud and independent Eliot Cutler. In the meantime, an advisory board formed by the Legislature to monitor the health insurance marketplace will examine the issue, said Mitchell Stein, a Cumberland health policy consultant who sits on the board.

The subsidies are key to making the marketplace insurance plans affordable for low- to middle-income families. They are available on a sliding scale for families that earn from 100 percent to 400 percent of the federal poverty level, or up to about $90,000 for a family of four. Without the subsidies, premiums would increase by an average of 78 percent for Mainers who buy through the marketplace.

Stein said it’s unlikely that the Washington appeals court ruling will be upheld. Common readings of the law show it intended for the subsidies to be available everywhere, he said, and it contradicts three other court rulings.

If Maine signed a contract with the federal government saying the state had its own marketplace but would use healthcare.gov for sign-ups and renewals, an administrative workaround, the subsidies would remain, Stein said.

“It would be a hybrid, but for the consumers there may be nothing different or very little different than the federal marketplace,” Stein said. Building an entirely new system to sign up for benefits seems redundant now that healthcare.gov is working he said.

LePage spokeswoman Adrienne Bennett wrote in an email response to questions that the administration is waiting for a resolution.

“The legal status of portions of the bill (as demonstrated recently) remains unresolved, and there are too many unanswered questions,” she wrote. “Complex technicalities make interpretation challenging, and unknown financial obligations – at a time when we face a fiscal crisis that we have yet to resolve – become extremely burdensome to businesses and families.”

Michaud wrote in an email that he believes the state should look at creating its own marketplace.

“We always have to be prepared for every possible scenario. I’ve always been in favor of Maine creating its own state-run (marketplace) that meets our state’s own unique challenges and demographic needs,” Michaud wrote. The state would, however, lose access to millions of dollars in federal grants to help set up a state-run marketplace from scratch if it waits until after the election. The grant deadline is in October.

Cutler told the Press Herald that while he was in favor of creating a state marketplace, he’s now leaning toward administrative fixes that would protect the subsidies.

“We ought to do everything we can to protect Maine people from losing the subsidies. We ought to create a safe harbor,” Cutler said.

Rep. Drew Gattine, D-Westbrook and a member of the health and human services committee, said an administrative fix is an “interesting option” and he would support examining ways to protect the subsidies.

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