Obamacare lawsuit survives motion to dismiss

Surviving a motion to dismiss isn't really a big deal. There are a lot of reasons to dismiss a lawsuit prior to actual trial, but surviving the motion doesn't mean you will win the case; it just means that the other side didn't find a way to kick you out on a technicality.

The lawsuit itself is actually pretty interesting. It targets the IRS's decision to pay subsidies in states that are not running their own exchanges -- and thus not opting in to Obamacare. Because Congress can't act directly, it conditions the enforcement of the individual and employer mandates on whether the state is receiving subsidies, in effect offering those subsidies as an incentive to create an exchange and allow the federal government to enforce the mandate in that state. If a state doesn't create an exchange, it doesn't get subsidies, and the federal government has no power to enforce the mandate. The IRS decided to pay the subsidies anyway, even for states using the federal exchange, and then to enforce the mandate anyway.

The Supreme Court may see this as a chance to revisit the law, if the case gets to that point, and given the disaster the federal exchange has been, allowing states to opt out entirely seems only rational. And if states can opt out, well, businesses can move to those states.

This entry was published Thu Oct 24 18:49:03 CDT 2013 by TriggerFinger and last updated 2013-10-24 18:49:03.0. [Tweet]

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