Peter Suderman on Obamacare's Absurdities


Over the years, Obamacare's defenders have made plenty of absurd arguments in service of the law, but perhaps the most absurd argument of all is that the language of the law does not actually mean what it plainly says. Yet that is essentially the argument that some of the health law's defenders are making in public and that they are preparing to make in court.

The law expands health coverage by providing subsidies to people buying health insurance through government-run health exchanges—online marketplaces intended to allow people to compare and purchase health plans. But the text of the law clearly states that those subsidies are only available to individuals who purchase insurance in exchanges erected by states. The Internal Revenue Service, however, has ruled that the subsidies will be also be available in the 34 exchanges run by the federal government. 

Obamacare's backers now have to defend the IRS ruling, as a challenge to the tax agency's rule makes its way to court. It's no mere legalistic squabble. Senior Editor Peter Suderman writes that the outcome of this dispute could eventually determine whether the IRS has the authority to disburse some $800 billion in federal funds—the estimated value of the subsidies in the 34 states where the federal government has taken responsibility for creating the exchanges.