Commentary

Jobs Depend on Obamacare Defeat

As if Obamacare weren’t problematic enough, two federal courts have found that the IRS unlawfully expanded the health care law’s individual and employer mandates, by imposing them on tens of millions of Americans whom Congress exempted. On Wednesday, the Supreme Court will hear King v. Burwell, a case challenging that illegal and ongoing attempt to expand Obamacare outside the legislative process.

The victims of this illegal Obamacare expansion include Kevin Pace, a jazz musician and adjunct professor of music in Northern Virginia. Anticipating the Obamacare mandate that employers cover all workers who put in at least 30 hours a week, Pace’s employer was forced to cut hours for part-time professors like him in order to avoid massive penalties. In 2013, The Washington Post reported that Pace was left with “an $8,000 pay cut.” “Thousands of other workers in Virginia” also had their hours cut. Even though the Obama administration has delayed the employer mandate, many employers have left the cuts in place for when the rules are enforced.

King v. Burwell is about more than IRS rules; it could kill the employer mandate, too.

This unlawful expansion of Obamacare’s employer mandate is causing workers across the country to lose more income with every passing day. It forced Utah’s Granite School District to cut hours for 1,200 part-timers. According to the state of Indiana, which filed a similar legal challenge, this IRS power grab pushed “many Indiana public school corporations (to) reduc(e) the working hours of instructional aides, substitute teachers, non-certified employees, cafeteria staff, bus drivers, coaches and leaders of extracurricular activities.”

Employers and consumers are also suffering. Pace’s employer, for example, has less flexibility to structure its health benefits and less ability to offer attractive educational options to its students. Their customers — the students — are suffering from having their educational choices limited.

Some victims lost jobs. Others lost their freedom to choose more flexible health benefits. And one study estimates that in states where the IRS imposed the employer mandate illegally, it cost millions of workers at medium-sized firms nearly $1,000 in lost wages per year.

“We’ve had lots of teachers move back in with their parents,” Pace told The Post last year. “They’re in their 40s. Some people have lost their homes. It’s awful.”

As if that weren’t bad enough, the IRS even expanded Obamacare’s infamous individual mandate, imposing it on an estimated 8 million Americans who are by law exempt. The IRS is illegally forcing millions of Americans to buy coverage they don’t want, and illegally forcing millions more to pay penalties for not buying coverage they don’t want.

Obamacare’s mandates are bad enough when they are legal. But as two lower courts have found, the IRS actions here are illegal.

The Affordable Care Act authorizes the disputed “employer mandate” penalties and the health insurance subsidies that trigger them, only through insurance exchanges that are “established by the State.” Due to public opposition to Obamacare, at least 34 states, including Virginia, Utah and Indiana, failed to establish exchanges. Those states are being served — if that’s the word — by HealthCare.Gov, an exchange established by the federal government, which is clearly not a “State.”

Ignoring the clear and unambiguous language of the statute, the IRS somehow decided to deploy the disputed taxes and spending in HealthCare.Gov states. Two lower courts found that Obamacare itself “unambiguously forecloses” the IRS’ “invalid” misinterpretation of the law.

The plaintiffs in King v. Burwell represent Kevin Pace and tens of millions of other Americans who are injured by this breathtaking power grab.

If the King plaintiffs prevail before the Supreme Court, it will mean more jobs, more hours and higher incomes for millions of Americans — particularly part-time and minimum-wage workers. Employers will have more flexibility to structure their health benefits. States will be able to attract new businesses by shielding employers from Obamacare’s employer mandate.

Critics complain such a ruling would eliminate subsidies in HealthCare.gov states, making the cost of Obamacare coverage transparent to enrollees.

But those enrollees will be able to switch to lower-cost “catastrophic” plans - if the Obama administration allows it. To date, the administration has adamantly refused to say whether it would take even this small step to help affected HealthCare.gov enrollees.

More important, transparency is a good thing. If enrollees don’t want to pay the full cost of Obamacare coverage, that tells us something very important about Obamacare. It means nobody likes the way Obamacare actually works. Forcing the IRS to implement the law as written will thus create an opportunity for real health care reforms that actually reduce the cost of care.

Reining in the IRS would affirm the rule of law, and lead to real health care reform. We should all hope for such an outcome.

Michael F. Cannon is director of health policy studies at the Cato Institute and co-author of Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.