Home > posts > Obamacare Subsidies Could be Illegal
October 29th, 2013 4:51 pm
Obamacare Subsidies Could be Illegal

If you think Obamacare-approved insurance is expensive now, imagine how high it could go if the Supreme Court rules federal subsidies illegal.

Currently, there are four lawsuits making their way through the federal judiciary. I’ve profiled one from Oklahoma previously, and its arguments are essentially the same as the others.

In a nutshell, the text of Obamacare makes federal subsidies available to people buying health insurance on state-run exchanges created under Section 1311 of the law. The law says nothing about subsidies being available for insurance bought through federally-run exchanges created under Section 1321.

The Internal Revenue Service tried to paper-over the problem by issuing a regulation that made subsidies available on both sets of exchanges, but that’s being vigorously challenged as an illegal affront to the plain meaning of the Obamacare statute.

As Sean Trende notes, this challenge to Obamacare, if successful, wouldn’t kill the law outright. That might make voting against the IRS’s power grab more palatable for Chief Justice John Roberts, who cast the crucial fifth vote to uphold the individual mandate last year.

Of course, if the subsidies aren’t available to people in the 34 states where HHS is operating an exchange, then the system will implode. Even with subsidies many people are struggling to pay for the higher costs. Take them away and a huge political backlash will be unleashed.

If any of these cases gets to the Supremes, let’s hope they stick to the law and leave the politics for Election Day.

Comments are closed.