I’m rather surprised that I missed this originally — but it was brought up on the forum and definitely deserves aTicker….
It turns out that ObamaCare makes an essential part of its regulatory scheme—an $800 billion bailout of private health insurance companies—conditional upon state governments creating the health insurance “exchanges” envisioned in the law.
This was no “drafting error.” During congressional consideration of the bill, its lead author, Sen. Max Baucus (D-MT), acknowledged that he intentionally and purposefully made that bailout conditional on states implementing their own Exchanges.
Note: Bailout. As in “hand money to private health insurance companies stolen from you” (as if the premiums they’ve been collecting aren’t enough to begin with!)
Now that it appears that as many as 30 states will not create Exchanges, the law is in peril. When states refuse to establish an Exchange, they are blocking not only that bailout, but also the $2,000 per worker tax ObamaCare imposes on employers. If enough states refuse to establish an Exchange, they can effectively force Congress to repeal much or all of the law.
That might explain why the IRS is literally rewriting the statute. On May 24, the IRS finalized a regulation that says the law’s $800 billion insurance-industry bailout will not be conditional on states creating Exchanges. With the stroke of pen, the IRS (1) stripped states of the power Congress gave them to shield employers from that $2,000 per-worker tax, (2) imposed that illegal tax on employers whom Congress exempted, and (3) issued up to $800 billion of tax credits and direct subsidies to private health insurance companies—without any congressional authorization whatsoever.
So the IRS (Treasury, that being Timmy Geithner) decided to ignore the law.
That’s not uncommon, you know.
The problem is that this isn’t an accident — it’s clear legislative intent. And that is documented, which makes for a wee problem in that the courts are rather more likely to get involved here as well.
The long and short of this is that PPACA, as designed by Congress and signed by the President gave the States the power to shieldtheir residents from the $2,000 penalty, er, tax. It also made conditional the bailout on state setup of exchanges, the very predicate for the funds.
But then some states revolted and said “no, we will not set them up.”
And in response the Executive (IRS, a division of the Treasury) appears to have simply ignored the law.
As for why you should care, it’s pretty simple: If the IRS ruling falls (and it appears that legally it will) any state that refuses to implement a state exchange effectively voids the penalty in that state. This means that if you live in such a state you are exempt from the “tax/penalty” should you choose not to buy health insurance.
When the government evidences clear intent to ignore the law you are left with only a few choices. We shall see how this one plays out, but one thing is quite clear: We have a rogue administration.
PS: For another view on this at substantial length, take a read here.