Another Fatal Flaw In ObamaCare -- Could It Sink the Law?

The ObamaCare bill that was passed last year was never written to become a law. It was a discussion draft. It was meant to be simply an intermediate step in the legislative sausage factory. But when the Democrats conspired to bypass Scott brown’s election, we got stuck with it.

Now we’re dealing with the consequences.

Any chance that Democrats had of legitimately passing their bill died on January 19, 2010 when Massachusetts' own Scott Brown was elected to the U.S. Senate promising to be the key vote -- number 41 -- to sustain a filibuster and block the bill.

That day, no lesser a left-wing icon than Rep. Barney Frank said: “I feel strongly that the Democratic majority in Congress must respect the process and make no effort to bypass the electoral results.”

That didn’t last long. The union front-group Families USA – heavily funded by pharmaceutical interests – came forward with scheme to precisely bypass the electoral results. It involved enacting the Senate-passed discussion draft from the previous December into law as is, with a follow-on reconciliation bill to add significant additional tax hikes, make some tweaks that unions wanted to see, and take over the student loan industry.

Of course, the discussion draft was packed full of the ordinary mistakes, errors, contradictions, and ambiguities that you would expect in an unfinished product. Now it’s all been dumped in the hands of regulators who have astonishing, unprecedented power to interpret what it all means – often asserting that it means the plain opposite of what it actually says.

Since then we’ve seen a string of questionable guidance documents and proposed rulemakings, in a massive expansion of bureaucratic discretion struggling to make sense of a nonsensical situation, the result of a discussion draft being passed into law.

For example, right after the bill was passed HHS Secretary Kathleen Sebelius sent a letter demanding insurance companies end pre-existing condition exclusions for children immediately – even though the law didn’t actually require them to.

Now comes the biggest glitch yet discovered. Perhaps big enough to collapse the whole edifice.

As Investors Business Daily aka IBD reports today, the massive taxpayer subsidies at the heart of ObamaCare may not cover nearly as many recipients as was hoped. Specifically:

“Section 1311 of ObamaCare instructs state governments to set up an exchange. If a state refuses, Section 1321 lets the federal government establish an exchange in the state.

Yet ObamaCare states that the tax credit is available to people who are enrolled in an ‘an exchange established by the state under (Section) 1311.’ It makes no mention of people enrolled in federal exchanges being eligible for the tax credit.”

Of course, Obama’s IRS can try to ignore the law, issue another dubious guidance document, and attempt to grant credits to participants in a federally-run exchange. But that would clearly violate the letter of the law, and if they try it they should lose in court.

Even before this glitch was discovered, it made sense for states to refuse to set up exchanges, which are tightly controlled by HHS under extremely restrictive rules. Now states can strike a body blow to ObamaCare by refusing to establish exchanges.
This is just one more reason this discussion-draft-turned-law version of ObamaCare is terminally flawed and must be repealed.

Phil Kerpen is vice president for policy at Americans for Prosperity and the author of the forthcoming book, “Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America -- and How to Stop Him” (BenBella Books, October 2011).