How the big court case against ObamaCare's subsidies stacks up

To cushion the blow of the individual mandate to purchase coverage and pay for associated increased costs, the ACA includes “premium assistance” for lower-income taxpayers. These subsidies are available to people who “were enrolled in through [sic] an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.”

If you’ve been reading carefully, you can see the problem. By its plain text, the ACA only provides for subsidies for people enrolled in an exchange that was (a) established by the state and (b) established under section 1311. (In case you were wondering, the law defines “State” as “each of the 50 States and the District of Columbia.”) This is the argument, in a nutshell, of those bringing the lawsuit. If you live in, say, Oklahoma, which didn’t set up an exchange, the ACA doesn’t appear to offer a mechanism for you to receive any subsidies.

If you’re an opponent of Obamacare, you’re probably nodding along vigorously. This case is made all the stronger because we’re talking about a congressional appropriation, and appropriations have to be expressly made by Congress under the Constitution.

But if you’re a supporter of Obamacare, you’re probably saying, “Oh, come on! It’s pretty clear Congress wanted everyone to get the subsidies.” That, in a nutshell, is the government’s response. The IRS therefore set forth a rule that extended the subsidies to those enrolled in a “State Exchange, regional Exchange, subsidiary Exchange, [or] a Federally-facilitated Exchange.”

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