Court rules against federal ObamaCare subsidies


Today, tea partiers everywhere were handed a major victory from the D.C. Court of Appeals. In a 2-1 decision, the court – often called the second-highest court in the nation – ruled [1] in Halbig v. Burwell that the federal government is not authorized to provide tax credits (subsidies) to those signing up for ObamaCare on the federal exchange.

It is well known at 36 states opted out of setting up their own state-run exchanges, deferring to the federal government. What was less known –until now – was that the text of the Affordable Care Act never authorized subsidies on the federal exchange. That’s key; subsidies are what was supposed to make Obamacare so affordable.

It’s hard to predict what will happen next. The left will place blame on states that refused to set up their exchanges, without answering why any state should have gone to the trouble in the first place. One word can characterize the state exchanges thus far: dysfunctional.

After spending millions to develop defective websites, the now-failed exchanges in Massachusetts, Oregon, Maryland and Nevada are collectively costing [2] U.S. taxpayers half a billion dollars.  Hawaii and Minnesota can also add their exchanges to the junk pile.

Is it true that those on the federal exchanges may now see their premiums skyrocket? Yes. But maybe the Democrats who wrote Obamacare should have also written a contingency plan for this very scenario. Maybe this is the problem with government micromanaging a free market economy.

In the wake of this morning’s ruling, government officials rushed to assure [3] enrollees they’d still get their subsidies. But no one knows how long HHS will keep up its poker face. In the face of a major court ruling telling them federal subsidies are against the law, the government is promising to pay them anyway. As we flesh out Halbig’s implications over the coming weeks and months, it will be interested to see which side blinks first.