Federal Judge Strikes Down Obamacare Insurer Bailouts

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Obamacare is unpopular for a whole host of reasons, most of which have to do with the individual mandate and the crush of regulations it places on businesses. One thing most people don’t really understand about Obamacare as it was passed, but which is probably the most fatal flaw in the law, is that it created a financially unsound system and prohibited insurers from reacting to the market adjustments by law.


The Obama administration has been busy trying to prevent the whole system from collapsing (and taking the private insurance market with it) by taking a series of blatantly unlawful unilateral actions to essentially rewrite the entire law – from erasing or rewriting deadlines, to offering unlawful credits to consumers who were on national exchanges (a program that was only saved by the political cowardice of John Roberts), and so forth.

The administration’s latest ploy has been to essentially bail out private insurers whose balance sheets have been decimated by participation in Obamacare with taxpayer dollars, in spite of the fact that the law contains no such provision. The administration’s “defense” to their action essentially was that the law said we can give tax credits to consumers so surely that means we can give them to insurers too, right? The first Federal judge to rule on the question disagrees:

A federal judge on Thursday ruled for House Republicans in their lawsuit against the Obama administration over ObamaCare.

In a major ruling, Judge Rosemary Collyer, an appointee of President George W. Bush, said the administration does not have the power to spend money on “cost sharing reduction” payments to insurers without an appropriation from Congress.


Given that the Supreme Court has already twice saved the law from a catastrophe of its own making, it’s hard to imagine that they won’t a third time, especially now that Justice Scalia has passed away. Granted, the stakes are at least theoretically lower in this case since there’s not even really an argument that the insurer bailouts are an essential part of the law, not even if you squint hard, but SCOTUS long ago decided to act as a rubber stamp for the administration’s unilateral actions in implementing Obamacare, and it’s hard to see this case being decided any differently.



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