A new federal court ruling may legally doom ObamaCare before it ultimately collapses under its own unsustainable weight.

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Things just went from awful to worse this week for ObamaCare, and the Obama Administration more generally. 

Nearly a month into its disastrous debut, it’s clear that the ObamaCare website isn’t just “glitching,” it’s completely melting down.  This is quickly becoming a watershed moment, a failure so obvious and deep that it could permanently stain Obama’s presidential legacy among historians long after he’s gone.  Among the familiar litany of failures throughout his tenure, healthcare legislation was the one signature legislative act to which he could point. 

And now it is disintegrating before his very eyes. 

In Florida alone, some 300,000 Florida Blue health insurance customers just received notice that their policies will be canceled due to ObamaCare because their coverage isn’t considered a “qualified health plan” under the new regulations.  Although the Obama Administration continues to refuse to disclose how many people have actually enrolled in ObamaCare since October 1, whatever that number is appears to come far short of the Florida Blue cancelation alone. 

And on that note, so much for the solemn pre-ObamaCare assurance that, “If you like your health care plan, you’ll be able to keep your health care plan, period.  No one will take it away, no matter what.” 

Now, a new federal court ruling may legally doom ObamaCare before it ultimately collapses under its own unsustainable weight. 

This week, a federal judge gave the green light for a lawsuit challenging ObamaCare’s structure of subsidies to proceed.  Judge Paul Friedman also ruled that the case can proceed on an expedited basis, meaning that a final determination could occur before the March 2014 individual purchase mandate arrives. 

The new lawsuit centers on a provision in the text of ObamaCare that allows subsidies to states participating in the program.  By its terms, the subsidies do not cover those participating in the federal government’s program, but now that 34 states have refused to participate in ObamaCare, the Obama Administration is attempting to ignore the law and offer subsidies regardless of the law. 

When ObamaCare was passed, Congress and the Obama Administration deliberately chose to empower individual states to carry out the law by creating health insurance exchanges, marketplaces in which those states’ citizens could buy insurance from authorized insurers.  But because the Constitution doesn’t allow the federal government to force individual states to carry out its edicts, the law had to come up with another way to induce states to agree to participate.  Consequently, the law offered individuals who chose to purchase insurance from state-run exchanges significant federal subsidies to persuade them to enroll. 

There was one significant problem with that scheme:  In states that chose to avoid participating in the looming catastrophe that is ObamaCare, residents would by law not be eligible for the subsidies offered to participating states. 

As it turned out, some 34 states refused the Obama Administration’s offer.  Consequently, the federal government is now on the hook for establishing exchanges for residents of non-participating states.  But under the explicit provisions of ObamaCare itself, such individuals are not eligible for premium assistance subsidies. 

So what did the Obama Administration decide to do? 

Per habit, it sought to just ignore its own law via IRS fiat, as summarized by plaintiffs: 

“Refusing to accept those consequences, the IRS promulgated the regulations at issue here, which base eligibility for premium assistance subsidies not on enrollment in coverage “through an Exchange established by the State,” as the statute requires, but rather on enrollment in coverage through any exchange, including the federally-established one.  Of course, the federal government is not a “State,” as the ACA in fact expressly reiterates.  Those regulations thus allow for the distribution of billions of dollars of federal funds that Congress never authorized.  The IRS rule contradicts the plain text of the ACA, exceeds the agency’s authority, and is contrary to law.” 

All of this presents a rich irony. 

Throughout the government shutdown over ObamaCare earlier this month, the law’s supporters cried, “It’s the law!”  Of course, the employer mandate was also “the law,” but the Obama Administration had no problem postponing it for a year.  Similarly, the text of the law also mandated that members of Congress and their staffers were subject to its requirements.  Yet the Obama Administration also had no problem granting an extralegal waiver, allowing subsidies that no other employees suddenly subject to ObamaCare’s provisions should receive. 

The Obama Administration showed no greater deference for “the law” when it unilaterally announced that it would refuse to enforce settled immigration laws last year.  Moreover, the very nature of a democratic republic is that settled laws can be revisited and often overturned, including by this administration.  Think the Defense of Marriage Act (DOMA) signed by Bill Clinton, as just one example. 

The court, however, wasn’t sufficiently impressed by the Obama Administration’s rationalization.  Which raises the question of what will bring this unworkable law to an end first – it’s economic and logistical unsustainability, or judicial order.  The latter would spare millions of Americans a great deal of unnecessary pain.