Robert Pear today writes about an emerging lawsuit over the health care law that I touched on Thursday. The language around the insurance exchanges and whether the state or federal government runs them is sufficiently vague that conservative legal functionaries think they can exploit it:

Starting in 2014, the law requires most Americans to have health insurance. It also offers subsidies to help people pay for insurance bought through markets known as insurance exchanges.

At issue is whether the subsidies will be available in exchanges set up and run by the federal government in states that fail or refuse to establish their own exchanges.

Critics say the law allows subsidies only for people who obtain coverage through state-run exchanges. The White House says the law can be read to allow subsidies for people who get coverage in federal exchanges as well.

If courts rule that individuals seeking coverage on federally administered exchanges cannot receive coverage subsidies, then it gives every right-leaning state a reason to refuse to run the exchanges and collapse the law. The lack of subsidies would make health insurance unaffordable to almost everyone eligible to receive them. And it would put many of them on the hook for the mandate penalty if they cannot afford coverage (the subsidies will be worth on average $6,000 per person). This would make large groups of people angrier and angrier about Obamacare and put more and more pressure on to change the law. It would “prove” to people that the health care law merely forced people to buy coverage they can’t afford or else they would have to pay a tax. The reality is more like that they are forced to buy cheap, subsidized coverage they may not end up being able to use in all cases, or pay a small and easily avoided tax. But a ruling saying that you can’t get subsidies for federal exchanges would deny people the opportunity to experience the law as it was written, and really ruin it before it has a chance.

And just to show that the “but the industry will stop this” model is inoperative, the insurance industry would HATE this outcome, as they would lose millions of customers. If they were rational, they would fight for states to set up their own exchanges. But if anyone wants to bet on their success in red states, I’ll take them up on the offer.

It seems almost impossible that the Supreme Court would rule that legislative intent was to have federally-run exchanges as a backstop if states failed to create one, but not to allow subsidized coverage for them, as they would for state-run exchanges. That just makes no sense. But the originalists probably have just enough ambiguity in the text to make that case, and of course, four of the Justices wanted to take down the entire law just a couple weeks ago. And the fact is that even defenders of the law admit that this was a drafting error. So you cannot discount this possibility.

The IRS wrote a rule allowing subsidies for the state or federal exchanges, and so Republicans get a double-whammy here of undermining a law they don’t like and criticizing the IRS for usurping legislative statutory power:

Representative Phil Roe, Republican of Tennessee, said the rule on premium subsidies “contradicts the explicit statutory language” of the Patient Protection and Affordable Care Act. Mr. Roe and another Tennessee Republican, Scott DesJarlais, have introduced a bill to nullify the rule, issued by the Internal Revenue Service [...]

However, Senator Orrin G. Hatch of Utah, the senior Republican on the Senate Finance Committee, said the Obama administration was usurping the role of Congress and rewriting the law to provide tax credits through federal exchanges.

The larger point here is that Republicans will never stop trying to take down this law. It won’t stop even if Mitt Romney loses in November. It won’t stop if Democrats somehow take over both houses of Congress. It won’t stop if Democrats do well in state legislative races in states where the Medicaid expansion is a toss-up. Republicans put their entire energy into stopping this law from taking effect. And they have a vast store of foot soldiers – in the political arena, in the legal community, in the states, in the think tanks and SuperPACs that try to influence public opinion – willing and able to do this work. The idea that President Obama or some Democratic leader can say “it’s time to move forward” after last month’s Supreme Court decision, and have that be honored, is just fanciful.

…just to add, these “drafting errors” that keep cropping up show what a rush job the actual writing of the Affordable Care Act was, even though the principals had months upon months to write it and incubate it. There was no standard severability clause in the law, which almost proved fatal at the Supreme Court. The coverage subsidies didn’t go below 100% of poverty because of an assumption that those people would get Medicaid, without a contingency in case a state refused to comply. The subsidies started at 100% FPL even though the Medicaid expansion went up to 133%, giving states, thanks to the Medicaid ruling at the Court, an incentive to lower their Medicaid rolls and push people above 100% FPL on the exchanges. Now there’s this drafting problem with federally-run vs. state-run exchanges. There were last-minute revisions to the law all over the place, but these are basic components that the drafters simply didn’t get right. The politics clearly took precedence over writing sound policy.