There is a new entrant in the list of challenges to Obamacare – a new challenge that limits the ability of Obamacare to provide subsidies to people buying health insurance off the federal marketplace, healthcare.gov, operating in more than 30 states. According to this new challenge, the language of the Affordable Care Act is such that it does not allow the Obama administration to provide federal subsidies to eligible people buying health insurance off the federal exchanges.
However if eligible consumers purchase insurance off state exchanges, only then can the government provide them subsidies. The Supreme Court has announced that it will be listening to the challenge, and if a resolution banning subsidies from federal exchanges comes to pass, a huge blow will be delivered to the ACA and Obama administration.
The Obama administration feels that the case is without merit and the ACA enables them to provide subsidies throughout the nation across both federal and state exchanges. The case, known as King v. Burwell, is similar to the Halbig v. Burwell case earlier this year, when the Court ruled against the government 2-1.
However, this time, the Obama administration, most likely, can last through the ordeal. Here are 9 reasons why:
1) When ACA was established, one thing was crystal clear that without the support of subsidies, the insurance market will not be stable under the law. The law would go into a death spiral and collapse before making any difference to the health insurance market.
2) When ACA was signed into a law, the states had an option to either establish their own exchange and receive federal subsidies or let the federal government integrate them with the marketplace they were creating. At that time, no state considered the chance that by letting their taxpayers shop on the federal exchange, they would be denying them a chance to get subsidies in the future.
3) Naturally, the design of the law will not forgo such a substantial and important aspect by mentioning it in an ambiguous and trite manner. Naturally, the lawmakers did not design the law as the challengers are mutating it to be.
4) The popular opinion on the law is not concerned with the fabricated ambiguity that the challengers have put forward, they are just concerned with the simple and pure meaning that federal subsidies are available to everyone, be it through federal exchange or the state exchange.
5) The IRS and HHS have both constructed the statute and have found it to be perfectly coherent and consistent with the original statute intention.
6) The challengers project that the health insurance exchange run by federal government should not be allowed to impart subsidies, as it is not established in the state. By that logic, if the federal exchange is not running in the state, a citizen of that state should not be allowed to purchase health insurance through the federal exchange.
7) ACA’s purpose will fall apart if the people shopping through those exchanges in 34 states which went with the federal exchange would not be allowed to avail the shield of subsidies.
8) If the Supreme Court agrees with the challengers, the same ACA which is helping residents in these 34 states get better health insurance will transform into a mandate that will dramatically impact the lower income groups by taking away subsidies.
9) The implication is that the Congress wanted the insurance markets to collapse in states, which decided to default to the federal exchange.
Although the Supreme Court is considering the case, it is a question of semantics that has caused this major headlock between two parties. While the nine reasons are not legally based arguments, they do raise important issues. This latest challenge, and ruling, will be interesting to watch, to say the least.