Ramesh Ponnuru writes about ObamaCare’s greatest vulnerability:
The debate over President Barack Obama’s health‐care law has taken another twist. Now conservatives and libertarians are defending it, while the administration tries to toss part of the legislation out.
The reason for this role reversal is that the drafters of the law outsmarted themselves and handed their opponents a weapon. Now they would like to pretend the law doesn’t say what it does.
Obama’s plan makes tax credits available to people who get health insurance from exchanges set up by state governments. If states don’t establish those exchanges, the federal government will do so for them. The federal exchanges, however, don’t come with tax credits: The law authorizes credits only for people who get insurance from state‐established exchanges. And that creates some problems the administration didn’t foresee, and now hopes to wish away…
The administration’s response to the impending failure of its signature legislation — a failure resulting entirely from its flawed design — has been to ignore the inconvenient portion of the law. In May, the Internal Revenue Service decided it would issue tax credits to people who get insurance from exchanges established by the federal government. It has thus exposed firms and individuals to taxes and penalties without any legal authorization. Obviously, that situation sets the stage for lawsuits.
The plaintiffs will have a strong case. Jonathan Adler and Michael Cannon — two libertarians, the first a law professor at Case Western Reserve University and the second a health‐care analyst at the Cato Institute — have done more than anyone to bring attention to this issue. They point out that every health bill advanced by Senate Democrats clearly made tax credits conditional on [states implementing the law]. They have also uncovered that during the debate over the bill, Senator Max Baucus, a Democrat from Montana, explicitly said the same thing.