â€œEstablished by the State.â€ Those four little words, explains A. Barton Hinkle, could be the undoing of Obamacare. The Supreme Court has agreed to hear King v. Burwell, a case challenging the governmentâ€™s authority to subsidize insurance purchased on federal health-care exchanges. In the view of Obamacareâ€™s critics, the question at the heart of the case is simplicity itself: One section of the Affordable Care Act stipulates that insurance subsidies shall be provided in any exchange â€œestablished by the State.â€ Federal exchanges are not established by the state. Therefore, the federal government cannot subsidize policies bought on exchanges in the two-thirds of states that did not set up their own exchange. Washington has been doing just that up to now, thanks to the IRSâ€™ contested interpretation of the law.
If the Court agreed with the lawâ€™s critics, then millions of Americans would find themselves forcedâ€"by the ACAâ€™s individual mandateâ€"to buy policies they cannot afford. That would be devastating to them and, ultimately, to the ACA.