Don’t blame King v. Burwell for ObamaCare’s failures

The King v. Burwell Supreme Court case, beginning oral arguments in March with a likely ruling by the end of June, is stirring up considerable controversy among those who pay attention to health care policy. The key to the case is whether the federal government can offer insurance subsidies to states that failed to set up insurance exchanges as directed by the law. If the Court finds for the plaintiffs, the subsidies—currently being handed out by the IRS—will stop, revealing just how expensive ObamaCare has actually made health insurance.

For this reason, many supporters of the Affordable Care Act will argue that this lawsuit is trying to “take away” money from poor people. The lawsuit is doing no such thing. This can be easily understood when we realize that the law itself was specifically written not to authorize these subsidies in the first place. The literal text of the Act says that subsidies are available to states that set up insurance exchanges. Period. No mention is made of states that refuse to cooperate. It was important that the bill be written this way, because otherwise, states would have no incentive to spend time and effort setting up insurance exchanges, if they thought they could just get the same amount of money anyway.