The Spectacle Blog

Obamacare’s Achilles’ Heel

By on 3.27.14 | 3:39PM

It’s hard to dot every “i” in a 2,000-page bill, but Congress’s negligence in specificity could be the fatal blow to Obamacare.

According to Talking Points Memo, the ACA specifies that only state exchanges are eligible for government subsidies known as “premium tax credits." In other words, the legislation prohibits the thirty-six states utilizing the federal exchange from receiving subsidy money for low-income Americans.

Cato’s Michael Cannon and Case Western law professor Jonathan Adler wrote the case against Obamacare revealing this terrifying blunder. An appeals court heard the argument on Tuesday while all eyes focused on the Supreme Court’s take on Hobby Lobby.

Should Cannon and Adler win the lawsuit, the consequences would cripple Obamacare. Millions of individuals living in states utilizing the federal exchange would remain uninsured because they can’t afford health care without the subsidies.

In January at the D.C. District Court, the case was struck down. Judge Paul Friedman called the claim “unpersuasive” since it disregarded the “history and purpose” of the ACA. For him, since Congress wanted the federal exchanges to act in the place of state-run exchanges, the dissenting argument is invalid.

But things changed at the D.C. Circuit Court of Appeals. The three appointed judges were split—one called the dissenters’ view “preposterous," while another held that the wording of the law was explicit, meaning only state-run exchanges can receive funding. The final appointee criticized Congress for not being specific, adding that it wasn’t his job to write law for legislators.

TPM reported that even if the three judges rule in Cannon's favor, their case would be passed to all eleven judges for another vote, where Obama’s appointees dominate the 7-4 split bench. However, if similar cases erupt and win in other courts, it could end up before the Supreme Court.

Read Cato’s argument:

The Patient Protection and Affordable Care Act of 2010 (“PPACA” or “Act”) declares in Section 1311 (42 U.S.C. § 18031) that “Each State shall . . . establish” an “Exchange” to regulate health insurance within each state; directs the federal government in Section 1321 (42 U.S.C. § 18041) to establish Exchanges in states that do not; and in Section 1401 (26 U.S.C. § 36B) offers health insurance tax credits to certain taxpayers who enroll in a qualified health plan “through an Exchange established by the State under Section 1311 of the Patient Protection and Affordable Care Act.”

Either Congress was exhausted while skimming the 2,000-page document, they assumed no one would notice, or they are incompetent in writing law. It would only take a few extra words to erase any ambiguity, but without those words the law is terribly flawed. Unless the Democrats choose to completely ignore their own legislation (not that Obama hasn’t before), they must either amend the law or repeal it.

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