That court ruled correctly that Congress did not give the federal government the power to provide subsidies and assess penalties in states that have yet to set up their own health insurance exchanges under the Affordable Care Act, commonly known as Obamacare. That ruling has the clear potential to make the ACA all but unworkable because it says federal subsidies can only be provided in states that have set up their own insurance markets. Thirty-six states have not set up such exchanges. The economics that underlay the ACA will not work on a 14-state model.
Meanwhile, the federal Fourth Circuit Court of Appeals in Richmond, Va., issued a ruling of its own a few hours later on a similar case that, in effect, completely upholds the subsidies in question.
So where does Obamacare go from here?
Administration spokesmen were quick to laugh off the first ruling and promised that those who have signed up for Obamacare via the federal exchanges and are now enjoying billions of dollars in federal subsidies from taxpayers will continue to be covered. And ObamaCare apologists offered Congress had intended for consumers in all 50 states to be eligible for the subsidies. But that’s not what the law said Congress passed. Then-House Speaker Nancy Pelosi memorably said it would be necessary to pass the Obamacare law to see what was in it. Tuesday’s ruling from Washington is proof positive she and her fellow Democrats did not read the bill closely enough.
The Obama administration has promised to appeal the Washington ruling to the full D.C. Court of Appeals. And with a heavy majority of its members having been appointed by Democratic presidents, including four by Mr. Obama himself, the presumption is they will bend over backward to rule in the administration’s favor.
Should that happen, all will not be over, however. The plaintiffs then could appeal to the U.S. Supreme Court. Should the case get to that point, all bets are off.
Not only was the Affordable Care Act rammed through to passage on a strict party-line vote, the administration and its minions at the IRS and elsewhere have rewritten the bill willy-nilly since then for political reasons and to reward friends. Now one of those rewrites has come back to bite.
But despite their best efforts, Obamacare is no more popular now than it was before. And anything the courts do now, short of upholding the Washington ruling and setting the country on a path toward a comprehensive reworking of the ACA — or better yet, starting over from scratch — is unlikely to change that.