When the Affordable Care Act was being debated in Congress, former House Speaker Nancy Pelosi infamously insisted that “we have to pass the bill to find out what’s in it.” It turns out, however, that the Obama administration—which has been making it up as it goes along with regard to ACA enforcement—doesn’t care “what’s in it.”
The IRS in particular has been implementing Obamacare as it thinks the law should be, not as it is. The ACA encourages states to establish health insurance exchanges by offering people who get their health coverage “through an Exchange established by the State” a tax credit—a subsidy to help them pay their premium. In the event a state declines to establish an exchange, Section 1321 further empowers the Department of Health and Human Services to establish federal exchange in states that decline to establish their own exchanges (without providing for the premium subsidy).
When, contrary to the expectations of the law’s achitects, 34 states declined to establish an exchange—two more have since failed—the IRS decided that those getting their insurance on federally established exchanges should qualify for tax credits regardless of the statutory text. In conflict with the U.S. Court of Appeals for the D.C. Circuit in a similar case called Halbig v. Burwell, the Fourth Circuit in King v. Burwell found the legal text to be ambiguous and thus deferred to the IRS interpretation.
Read more at http://www.cato.org/blog/supreme-court-must-resolve-obamacare-chaos
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