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It turns out that ObamaCare makes an essential part of its regulatory
scheme—an $800 billion bailout of private health insurance
companies—conditional upon state governments creating the health
insurance “exchanges” envisioned in the law.
This was no “drafting error.” During congressional consideration of the bill, its lead author, Sen. Max Baucus (D-MT), acknowledged that he intentionally and purposefully made that bailout conditional on states implementing their own Exchanges.
Now that it appears that as many as 30 states will not create
Exchanges, the law is in peril. When states refuse to establish an
Exchange, they are blocking not only that bailout, but also the $2,000
per worker tax ObamaCare imposes on employers. If enough states refuse
to establish an Exchange, they can effectively force Congress to repeal
much or all of the law.
That might explain why the IRS is literally rewriting the statute. On
May 24, the IRS finalized a regulation that says the law’s $800 billion
insurance-industry bailout will not be conditional on states creating Exchanges. With the stroke of pen, the IRS (1) stripped states of the power Congress gave them
to shield employers from that $2,000 per-worker tax, (2) imposed that
illegal tax on employers whom Congress exempted, and (3) issued up to
$800 billion of tax credits and direct subsidies to private health
insurance companies—without any congressional authorization whatsoever.
Some supporters of the law claim that Congress never intended to give
states the power to block ObamaCare’s insurance-industry bailout. No
doubt there are many in Congress who held that position. But they lost.
If they’re unhappy now, they should take it up with Max Baucus.
What they should not do is set a precedent where the IRS can, on its
own discretion, tax one group and subsidize another to the tune of $800
billion.
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