Ramesh Ponnuru explains the next seemingly fatal flaw in ObamaCare:
Obama’s plan makes tax credits available to people who get health insurance from exchanges set up by state governments. If states don’t establish those exchanges, the federal government will do so for them. The federal exchanges, however, don’t come with tax credits: The law authorizes credits only for people who get insurance from state-established exchanges. And that creates some problems the administration didn’t foresee, and now hopes to wish away.
Legislative debate over the law didn’t go into great detail about these provisions. We can surmise what happened, though. Supporters of the legislation wanted to encourage states to set up the exchanges. So they offered the states a deal: If they did so, they would get to write their own rules, and their citizens would be able to get the tax credit. The states would also gain extra flexibility on Medicaid spending. The law’s supporters also expected the health-care law to become more popular over time.
Taxes and Penalties
That hasn’t happened. Many states are determined in their opposition, and few of them have set up exchanges. If they don’t do so, the tax credits don’t go into effect and the federally established exchanges won’t work: People won’t be able to afford the insurance available on them without the subsidy.
Trouble in paradise yet again? Well, we have to pass the bill in order to find out what's in it.
Here is the Adler/Cannon paper which lays out the case against ObamaCare in numbing detail. The Congressional Research Service took a look at these legal issues but did not pound the table either in support or refutation of the Adler/Cannon view.
Timothy Jost does pound the table in defense of ObamaCare, explaining that the legislative history and Congressional intent are clear. Both Yost and Adler/Cannon cite an exchange between Senators Baucus and Ensign when the Finance Committee was discussing various amendments; the relevant exchange begins on p. 326 here.
And the upshot? Another feast for the lawyers, and wouldn't it be swell to see John Roberts get another bite of this apple?