The Corner

No State Exchange, No Obamacare Subsidies, Another Federal Court Rules

I admit that I haven’t had much confidence in the chances of lawsuits, which argue against federal subsidies in states without exchanges, prevailing.

Sure, the law explicitly states that only residents in states that set up exchanges qualify for federal premium subsidies.

And sure, that provision might well have been put in as an incentive for states to create their own exchanges, rather than a mere drafting mistake as the law’s defenders contend.

But c’mon! Chief Justice John Roberts, writing for a five-vote majority, found that Obamacare’s individual mandate constitutional as a tax — in the same ruling in which the same majority found they could hear the case because it wasn’t a tax!

Coherence and applying the plain meaning of the law had nothing to do with it.

Thus, when a D.C. Court of Appeals panel ruled 2–1 against federal subsidies in states without exchanges, I thought the ruling would evaporate immediately. And so it did when the Circuit accepted the case en banc.

But now, an Oklahoma federal judge has also ruled that there can be no federal subsides in states without exchanges. 

This ruling increases the chances that the question will end up in the Supreme Court — the same one that found the mandate both was and wasn’t a tax.

So my skepticism about the argument prevailing remains. But the question has certainly gained some heft. 


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