The Department of Justice didn’t get their way when a federal judge decided not to throw out a case against Obamacare. While U.S. District Judge Paul Friedman denied a temporary injunction that would have prohibited the IRS from issuing Obamacare subsidies to states that opted out of setting up their own exchanges, he will allow the lawsuit to proceed. The subsidies will be used to entice people to enroll through an Obamacare exchange. That is, if they can get through to the website in the first place.
We hear liberals drone on all the time about how Obamacare is the “law of the land,” and that tea partiers need to get over it, because Obama was elected and re-elected on the issue of Obamacare, and that it was passed by the Congress and upheld by the Supreme Court.
Well, if it’s the “law of the land,” then why does the Obama administration not have to follow it? There are currently 36 states which decided not to set up their own exchanges. Only 14 have done so. According to this “law of the land,” the IRS is not allowed to pay out subsidies to those 36 states. They can only issue subsidies to the 14. These subsidies are in violation of section 1311 of the [un]Affordable Care Act:
“Section 1311 of the ACA provides for premium subsidies to insurance companies in state exchanges only. No such funding mechanism exists for a federal exchange, leaving the feds unable to offer the billions of dollars of taxpayer-funded subsidies needed to purchase insurance company support. Let’s assume, for the sake of argument that the Obama administration decides to ignore the law (what a stretch!) and distribute subsidies on a federal exchange anyway. This would create an actionable breach of the law, and those affected by it (employers within the state) would have standing to sue. But that benefit is out the window if a state sets up an exchange.”
For this reason, a group of four individuals and three employers, each from one of the 36 exempted states, has filed a lawsuit against the feds. And Obama’s DOJ has of course motioned to have the case thrown out. But not this time. It will proceed, and the judge stated that he will rule on the merits of the case by February 15.
If the judge finds the Obama administration in violation of the law, and he orders them to stop issuing taxpayer-funded subsidies to those states which have not set up their own exchanges, it could completely collapse the Obamacare system. Let’s hope for the best.