Someone you probably are not familiar with has filed a suit you probably have not heard about concerning a four word phrase you should know about. The suit could blow to smithereens something everyone has heard altogether too much about, the ACA.
Scott Pruitt and some kindred spirits might accelerate the act's collapse by blocking another of the Obama administration's lawless uses of the IRS. Pruitt was elected Oklahoma's attorney general by promising to defend states prerogatives against federal encroachments, and today he and some properly litigious people elsewhere and defending a state prerogative that the act explicitly created. If they succeed, the act's disintegration will accelerate.
Because under the ACA, insurance companies cannot refuse coverage because of an individual's pre-existing condition. Because many people might therefore wait to purchase insurance after they become sick, the act requires a mandate to compel people to buy insurance. And because many people cannot afford the insurance that satisfies the act's criteria, the act mandate makes it necessary to provide subsidies for those people.
The four words that threaten disaster for the ACA say the subsidies shall be available to people who purchase health insurance in an exchange "established by the state." But 34 states have chosen not to establish exchanges.
So the IRS, which is charged with enforcing the act, has ridden to the rescue of Barak Obama's pride and joy. Taking time off from writing regulations to restrict the political speech of Obama's critics, the IRS has said, with its breezy indifference to legality, that subsidies shall also be dispensed to those who purchase insurance through federal exchanges the government has established in those 34 states. Pruitt is challenging the IRS in the US District Court for the Eastern District of Oklahoma, and there are similar challenges in Virginia, and Washington DC.
The IRS says its "interpretation" -- it actually is a revision -- of the law is "consistent with," and justified by, the "structure of" the act. The IRS means that without its rule, the act would be unworkable and that Congress could not have meant to allow this. The act's legislative history, however, demonstrates that Congress clearly -- and, one might say, with malice aforethought -- wanted subsidies available only through state exchanges. Some have suggested that the language limiting subsidies to state run exchanges is a drafting error. Well.
Some of the act's myriad defects do reflect its slapdash enactment, which presaged its chaotic implementation. But the four potentially lethal words were carefully considered and express Congress' intent. Congress made subsidies available only through state exchanges as a means of coercing states into setting up exchanges.