Here is How Obamacare is Going to Implode

Cato Institute’s Michael Cannon exposes the fraud of Obamacare signups.

Barack Obama wants you to know he enrolled 7.5 million Americans through Obamacare’s health insurance Exchanges. What he doesn’t want you to know is how.

Federal courts may soon rule that President Obama induced the majority of those enrollees to enroll by offering them taxpayer dollars he has no legal authority to spend.

If the courts put a stop to that unauthorized spending, a majority of Exchange enrollees would suddenly face the full cost of Obamacare coverage, and enrollments would plummet.

Under the Patient Protection and Affordable Care Act, states have the option of establishing an Exchange themselves, or letting the federal government do it. The Act also authorizes subsidies that can require taxpayers to cover nearly the entire premium for Exchange plans. Among the eligibility criteria for those subsidies is a requirement that recipients enroll “through an Exchange established by the State.”

Such requirements are routine, and this one is and unequivocal. Countless federal programs offer subsidies only in states that agree to implement them. The PPACA’s legislative history is littered with Republican and Democratic proposals to offer various subsidies — including tax credits and Exchange subsidies — exclusively in states that establish Exchanges.

The eligibility rules for the PPACA’s Exchange subsidies specify nine times, without deviation, that recipients must enroll “through an Exchange established by the State.” House Democrats even complained about this part of the Senate-passed PPACA before they themselves approved it, so they knew exactly what they were sending to the president’s desk.

Confounding supporters’ expectations, 34 states declined to establish Exchanges. Under the plain terms of federal law, subsidies are therefore available in the 16 Exchanges established by states, and not available in the 34 Exchanges established by the federal government.

In 2011, however, the Obama administration unilaterally announced it would force taxpayers to subsidize insurance purchased through federal Exchanges as well. It cited no statutory authority for its decision, and has stubbornly refused to follow its own law despite immediate and sustained criticism.