The latest chaos associated with Obamacare could have an impact on North Carolina.
A ruling yesterday by a federal court was a major jolt to the health care law. A D.C. Circuit Court of Appeals panel wrote that the Affordable Care Act (ACA) does not allow the IRS to pay subsidies to enrollees in federal exchanges. In a 2-to-1 decision, the judges said that “the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges 'established by the State.'”
Thirty-four states, including North Carolina, declined to open their own exchanges. The actual text of the law, as cited above, says subsidies to poor people can go only to people who sign up on exchanges “established by the State.” If the law stands and NC refuses to open its own exchange — more on that below — people in North Carolina would not be eligible for Obamacare subsidies.
A separate federal court concluded that the actual words of the law can be ignored, and the Obama administration has appealed the D.C. Circuit’s three-judge panel ruling to the full appeals court. All this may well send the case to the Supreme Court. For now, the Obama administration has decreed the subsidies can continue.
In the mean time, chaos reigns. More than four out of five ACA enrollees qualify for subsidies. It seems plain that if people can’t get subsidies from the state exchanges many will drop their ACA coverage. That would cripple ACA finances, and presumably undercut political support as well.
What happens next? Conservatives should be wary. For one thing, this legal mess could put more pressure on Gov. Pat McCrory and the NC General Assembly to establish a state-run exchange. As explained in this article, previously states could resist setting up exchanges, but citizens of the state could still get federal subsidies. But if the courts affirm that subsidies can go only to people in state-run exchanges, you can bet that liberals, Democrats, newspaper editorial boards, and medical-industry lobbyists will be howling for North Carolina to establish an exchange to ladle out those subsidies.
Meanwhile, another hit to Obamacare will hearten conservatives who believe it will hammer our health care and the state’s finances, not to mention our freedoms. The ACA is based on a bad idea whose execution was botched in every conceivable way, and a few that were inconceivable before the law was passed. That will make it even more important for North Carolina to hold out as a bulwark against this damaging law.