If States Don’t Set Up Exchanges…

No one gets ObamaCare subsidies:

Obama’s plan makes tax credits available to people who get health insurance from exchanges set up by state governments. If states don’t establish those exchanges, the federal government will do so for them. The federal exchanges, however, don’t come with tax credits: The law authorizes credits only for people who get insurance from state-established exchanges.

The uninsured won’t face penalties:

The law introduces penalties of as much as $3,000 per employee for firms that don’t provide insurance — but only if an employee is getting coverage with the help of a tax credit. No state exchanges means no tax credits and thus no employer penalties. The law also notoriously penalizes many people for not buying insurance. In some cases, being eligible for a tax credit and still not buying insurance subjects you to the penalty. So, again, no state exchange means no tax credit and thus fewer people hit by the penalty.

More on why the right is now defending ObamaCare in the Bloomberg.

Comments (9)

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  1. Jimmy says:

    One of the downsides to writing a 2400 page law is that it takes years to fully vet and correct the wording of the legislation. Dems might have shot themselves in the foot with this one..

    Also, read yesterday that Nancy Pelosi claims to have read the entire bill.


  2. Charlotte Spencer says:

    Flaws after flaws…it seems ObamaCare was designed to fail..

  3. Alex says:

    What a colossal mess…

  4. seyyed says:

    if states opt to not create exchanges, there is no tax penalty. unless there is no penalty for not creating the exchanges, it looks like the right wins.

  5. Robert says:

    But what about RomneyCare?

  6. August says:

    Lawsuits for everyone!

    “In May, the Internal Revenue Service decided it would issue tax credits to people who get insurance from exchanges established by the federal government. It has thus exposed firms and individuals to taxes and penalties without any legal authorization. Obviously, that situation sets the stage for lawsuits.”

  7. Linda Gorman says:

    Michael Cannon of Cato has been in the forefront of pointing this out. The IRS has said that federal exchanges can provide subsidies has well because the omission in the law was akin to a copyists error.

    Oklahoma is suing, saying that it chose not to establish an exchange in order to protect its citizens from mandate fines.

    I don’t think that this amounts to “the right is defending ObamaCare.”

  8. Roget says:

    Alex just gave one of the most prolific assessments of Obamacare I’ve ever heard.

  9. mike marcus says:

    John, You are somewhat in error and misleading in your above article.
    The federal exchanges that are “created” for non participating states Will in fact have the ability to offer tax credits.
    I also think it would be more honest of you to note that the $3,000 fine DOES NOT apply to small employers with less that 200 employees. A small oversight on your part?