Shortly after the U.S. Supreme Court issued its ruling in King v. Burwell on Thursday, President Obama made a statement that began, “Five years ago, after nearly a century of talk, decades of trying, a year of bipartisan debate — we finally declared that in America, health care is not a privilege for a few, but a right for all.”
That phrase, “we finally declared,” is perhaps more telling than the president meant it to be — a tacit admission that what congressional Democrats did by passing the Affordable Care Act in 2010 was something less than create new law. They expressed a desire, declared their desire to be law, and told the Department of Health and Human Services and the Internal Revenue Service to make it so.
Thus, when 34 states declined to set up a health-insurance exchange in accordance with the ACA, and HHS was obliged at the last minute to cobble something together in all those states, the IRS simply declared that an exchange “established by the state” could also refer to something quite different: an exchange established by HHS. It was a convenient and seemingly painless way to solve a problem that had cropped up. If subsidies were allowed only on exchanges created by states (as the ACA rather plainly stated) and not on those set up by HHS, then millions of people would not be able to afford very expensive ACA-compliant health coverage. You need subsidies to afford those plans, after all. Something had to be done. So the IRS took care of it and the Supreme Court said, okay.