Federal Court Rejects Key Obamacare Subsidies

The Affordable Care Act, known “affectionately” as Obamacare, rests very precariously on a few key contingencies. For one, a large number of people have to enroll in order to make it financially solvent. Second, in order for these people to enroll, they rely on federal subsidies (tax credits) to make Obamacare affordable to them. If it’s not affordable, they aren’t required by law to enroll. If they don’t enroll, the whole system could fall apart.

Now a federal appeals court could completely undermine the affordability of Obamacare by claiming that federal subsidies through Healthcare.gov are illegal:

In a potentially crippling blow to Obamacare, a federal appeals court panel declared Tuesday that government subsidies worth billions of dollars that helped 4.7 million people buy insurance on HealthCare.gov are illegal.

The 2-1 ruling said such subsidies can be granted only to people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia—not on the federally run exchange HealthCare.gov. The ruling relied on a close reading of the Affordable Care Act. . . .

Tuesday’s ruling endorsed a controversial interpretation of the Affordable Care Act that argues that the HealthCare.gov subsidies are illegal because ACA does not explicitly empower a federal exchange to offer subsidized coverage, as it does in the case of state-created exchanges.

Many states refused to set up state-wide healthcare exchanges, so citizens of those states had to get coverage through the federally subsidized plan. If other high courts confirm that those federal subsidies are indeed illegal, then Obamacare could basically vaporize. Without federal subsidies, Obamacare isn’t affordable. Without affordability, Obamacare doesn’t have the number of enrollees it needs. So even the other enrollees might lose coverage when a smaller insurance pool drives up premiums.

Of course, leftists are furious over this ruling. Even though the ruling is technically very accurate, most leftists agree that the spirit of Obamacare is being undermined:

[White House spokesman Josh] Earnest said “it was obvious” that Congress intended subsidies, or tax credits, to be issued to Obamacare enrollees regardless of what kind of exchange they used to buy insurance.

It might be obvious, Mr. Earnest. But it’s not the law. Too bad. That’s one of the downfalls of creating legislation so extensive and obtuse that its regulatory application is eight times longer than the Bible. It’s hard to think of everything. Especially when no one reads the law until after it’s passed.