Major Blow to ACA

They make no mention
Of the beauty of decay
Blue, yellow, pink umbrella
Save it for a rainy day
--Tears For Fears

This morning the DC Circuit Court of Appeals ruled that the Affordable Care Act does not permit the federal government to issue insurance subsidies to enrollees in states that do not operate their own exchanges. The decision reverses a lower court ruling that the federal government did have such authority.

The ruling is grounded primarily in the ACA language itself, which in several instances limits subsidies and credits to any "Exchange established by the State." Thirty six states opted not to operate their own health insurance exchanges.

While it is destined to be appealed and likely headed for the Supreme Court, today's ruling vacates the IRS regulation allowing the federal exchange to give subsidies. More than 80% of enrollees on the federal exchange receive subsidies, and those subsidies cover over three quarters of the premium on average.

This is a major blow to Obamacare, perhaps a lethal one. Interestingly enough, it is a self-administered blow. The law is tripping over its own bureaucratic syntax.