A Huge Blow to Obamacare

In a huge blow to Obama’s health care law and his executive powers, a D.C. Federal Appeals Court says enforcement actually has to stick to what the law says.

Once the Affordable Care Act was passed, President Obama must have realized it didn’t quite say all that he intended it to say.  So in a federal attempt to get around his own pet law, the IRS set out a regulation that directly contradicted the ACA as passed by Congress.

The specific issue is who can receive healthcare tax credits from the IRS.  The language of the Affordable Care Act specifies that only individuals who purchase coverage through state exchanges are eligible.

This presented a problem when 36 states refused to create Obamacare exchanges.  No big deal, right?  Their citizens can use the federal exchange.  But they won’t be eligible for the tax credits or subsidies.

And those subsidies can make a big difference in whether or not a person or their employer is held to the “minimum essential coverage” mandate.  Those who don’t comply can face a penalty, unless “the annual cost of the cheapest available coverage, less any tax credits, would exceed eight percent of their projected household income. …By some estimates, credits will determine on which side of the eight-percent threshold millions of individuals fall.”

That’s millions of tax penalties the Administration didn’t want to miss out on.  Who to put on the job?  Call in the IRS, with no statutory authority.  The agency came up with a new regulation to extend subsidies to insurance purchased on the federal exchange, thereby dramatically expanding the individual and employer mandates.

And they got called out on it.  The Court rightly decided that “the principle of legislative supremacy” – that is, what the law actually says – trumped the Administration’s desire to subsidize more health insurance plans.

Our duty when interpreting a statute is to ascertain the meaning of the words of the statute duly enacted through the formal legislative process. This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed, life-tenured judges.

The Administration will likely appeal, and we’ll see more of this struggle.  But in the meantime, ACLJ’s David French calls the ruling “an important milestone in the ongoing battle against executive branch lawlessness.”