It's on to the booth review!
In Blow to Health Law, Appeals Court Limits Subsidies
WASHINGTON — In a ruling that could upend President Obama’s health care law, a federal appeals court ruled Tuesday that the government could not subsidize premiums for people in three dozen states that use the federal insurance exchange. The 2-to-1 ruling could cut off financial assistance for more than 4.5 million people who were found eligible for subsidized insurance in the federal exchange, or marketplace.
Under the Affordable Care Act, the court said, subsidies are available only to people who obtained insurance through exchanges established by states.
The law “does not authorize the Internal Revenue Service to provide tax credits for insurance purchased on federal exchanges,” said the ruling, by a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit. The law, it said, “plainly makes subsidies available only on exchanges established by states.”
For many people, their share of premiums could increase sharply, making insurance unaffordable.
Michael Cannon of the Cato Institute, a libertarian think tank, and Jonathan Adler of Case Western Reserve University School of Law first made the case against the subsidies, arguing that Congress wanted the subsidies to serve as a reward for states that established their own exchanges. Obamacare's "congressional sponsors created incentives for states to implement much of the law and reasonably expected that states would do so," they wrote.
More on the theory here:
Meanwhile, Adler and Cannon recorded their finding in a Wall Street Journalop-ed in November 2011. The IRS was acting against the plain language of the law, they argued. As Cannon tells it, the duo then decided to do more research, which led them to believe that this was not, as they had called it in the Journal, a “glitch.” Instead, they argue Congress intentionally decided to withhold subsidies from federal exchanges.
Constitutionally, the federal government cannot order states to create the exchanges, so Adler and Cannon contend that Democratic lawmakers intentionally withheld premium assistance to strong arm states into implementing their own exchanges. Though this is not explicitly stated in the law, Cannon and Adler point to a handful of comments that they argue infer subsidies were intended for state-run exchanges – but there is no explicit evidence. Now that 36 states decided not to create their own exchange, Cannon and Adler maintain that the IRS is not carrying out the letter of the law.
For my money that theory makes perfect sense, but libs and judges who believe in a living, breathing Constitution also seem to believe in living, breathing statutues. The text serves only as opaque clues to what is actually legal.