The Hill reports that the Department of Health & Human Services is trying to curb fallout from an adverse ruling in King v. Burwell by deeming states to “have been ‘conditionally approved’ to set up their own healthcare marketplaces[.]” This amounts to deeming three states, at this point Arkansas, Delaware and Pennsylvania, to have “established” Obamacare exchanges.
As law professor Josh Blackman points out, though, neither Delaware nor Pennsylvania has done anything worthy of approval, “conditional” or otherwise. (I haven’t found the Arkansas application.) Neither state has passed the required legislation to create an exchange. Neither state has appropriated funds for an exchange, failing Obamacare’s requirement that each state exchange be “self-sustaining” in 2015. This casts doubt, to put it mildly, on whether either state could “[d]emonstrate operational readiness” as required by HHS’s own standard.
Moreover, Obamacare doesn’t distinguish between “conditional” approval of a state exchange program and a regular “approval.” Regardless of what HHS claims, “conditional approval” is just legal hand-waving until the statutory criteria are satisfied. If HHS and IRS go forward with their plan anyway, they will be rewriting Obamacare just as much as the regulation challenged in King v. Burwell. They’ll probably also trigger yet another lawsuit forcing the Administration to obey its own favorite legislation.






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