“Obama Scare” Hits a Legal Roadblock

Obamacare has hit a legal roadbl0ck. The majority of people receiving government subsidies to “buy” health insurance might now be unable to do so, according to a very recent Federal appeals court ruling.

Though the ruling is likely to be appealed, the decision threatens to gut the foundation of the law by potentially nixing subsidies that millions of people obtained through the federally run exchange known as HealthCare.gov.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled 2-1 that the IRS went too far in extending subsidies to those who buy insurance through that website.

The suit maintained that the language in Obamacare actually restricts subsidies to state-run exchanges — of which there are only 14 — and does not authorize them to be given in the 36 states that use the federally run system. [Source: CNN.com and FoxNews.com 7/22/14]

The ruling represents concern over a legal technicality, not over any question of fundamental principle. The Supreme Court had its chance to overturn Obamacare on fundamental principle, and missed the opportunity.

Fundamental principle refers to such things as whether individuals have a moral and legal right over their own lives, property and income; and whether charity should be enforced at gunpoint or strictly voluntary in nature. Separation of economics and state, including charity and state, are matters of moral principle.

Technical matters, such as this ruling, focus on whether subsidies are best distributed by the IRS or by some other government authority. While not irrelevant, such technical rulings will not save us from the coercive nightmare of red tape and arbitrary rule we have created for ourselves. Barack Obama and his Department of Justice will have no problems rationalizing executive orders and all manner of other legalistic manipulations to do whatever they please.

At the same time, economic questions which arise about Obamacare are routinely evaded as well, and this latest decision reminds us of this fact.

As the law stands, millions of people who are required to buy health insurance, but cannot afford to do so, are provided trillions of dollars in federal subsidies for this purpose.

Now think about the economics of this for a moment. The whole reason the government passed this law is because health insurance is supposedly too expensive for most people to afford it. How is paying people to purchase plans whose price is always escalating supposed to bring the cost of health care down?

Remember that supply and demand is an economic principle always in operation. Government can thwart it, but not obliterate it.

The more customers government sends the health insurance companies’ way, the more demand this will create relative to supply. Millions of people now enter the health care “market” with subsidies the federal government has provided them. Prices for health insurance can only go up.

Those ineligible for subsidies will be paying more and more for health insurance over time. This includes not only self-employed individuals, but also large corporations who still purchase most of the health insurance out there, on behalf of employees. What will this do to the overall economic health of the private sector, the very thing the federal government counts on in order to finance these trillions of dollars in subsidies?

Laws such as Obamacare operate on the premise that either the private sector does not matter, or that the private sector will always come up with more money to fund the endless goods and services the government promises to citizens now, as well as in the future. You’d think that the spiraling deficts and national debt would show this not to be the case, but those who support Obamacare dismiss such points as “hatred” or antipathy towards “the poor.”

You’d also think that if controlling health care costs were, in fact, the actual priority, that advocates of Obamacare would at least support opening up the marketplace so that supply and demand could ultimately bring the cost of health insurance down, as always happens in any marketplace unfettered by government intervention.

Instead, Obamacare strengthens the role of regulation in health care and insurance. That’s why millions of people (myself included) either lost their existing health insurance plans April 1, or ended up paying higher premiums for fewer benefits, because of all the new regulatory requirements placed on health insurance companies by this senseless law.

It’s ludicrous to assume you can decrease the cost of something by providing trillions of dollars in “free” money for people to buy that item in greater numbers than ever before.

Everything government touches turns to inefficiency, irrationality and mismangement — all at a higher cost. This latest court decision doesn’t tell us anything new, but serves as an eloquent reminder of what a mistake this ridiculous law turned out to be.

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