President Barack Obama is facing a “death spiral” for Obamacare as a federal court weighs a controversial legal challenge that could wipe out healthcare subsidies for millions of Americans.

The “bomb-thrower” case that could spark the destruction of Obama’s landmark domestic policy centers around the subsidies that 5 million Americans received when buying insurance through the HealthCare.gov exchanges, which sold coverage for 36 states this year, according to CNBC.

The plaintiffs in the little-known case, Halbig v. Sebelius, allege that these subsidies were illegal because Obamacare only permitted tax credits to be given to people who had bought insurance from the 14 individual states with their own exchanges, as well as the District of Colombia, not federal exchanges.

CNBC reported that 90 percent of enrollees in the federal exchanges qualified for subsidies due to their low or moderate incomes. The Affordable Care Act could go into a tailspin, before finally crashing and burning, if the courts now rule that those credits are illegal. (1)

This is what you get when you illegally ram through a bill that is only half written. Much of the ACA had yet to be resolved and normally would have been accomplished by a House-Senate Conference Committee. But when Scott Brown unexpectedly won Teddy Kennedy’s Senate seat the Democrats had to invent new procedures to ram this bill through Congress.

1. In order for the Dems to succeed in their plan they needed 60 Seats in the Senate to make a super-majority, so they convinced Arlen Specter a Republican to switch parties.
2. Then because all spending bills must originate in the House of Representatives the Senate took the House Bill H.R. 3590, a bill giving housing tax breaks for service members (nothing to do with Healthcare) and rewrite the bill to be a healthcare bill.
3. On December 24, 2009 the new bill was passed by the Senate.
The date is important because in Nov Scott Brown (Republican) was elected Senator replacing Ted Kennedy but would not take office until Jan 2010.
So in Jan the Dems would only have 59 Seats and no longer a super majority.
4. Then the new bill was sent back to the House.
The normal process the bill would go to committee get changed voted on and then go back to the Senate where the Bill might have been stopped by the Reps.
But instead of following the normal process the House Dems decided to vote on Senate bill as is.
This way it would not have to get back to the Senate and the President could sign it as is.
5. The House passed the Senate bill with a 219–212 vote on March 21, 2010, with 34 Democrats and all 178 Republicans voting against it.
6. Obama signed the ACA into law on March 23, 2010.

Now fast forward
1. The Reps controlled the House and passed a bill funding the Entire Government except for the Healthcare law.
2. The Bill went to the Senate
Normally the Bill would go to Committee get changed and voted on.
But the Democrat leadership in the Senate only allowed 1 change (amendment) to the bill funding the Healthcare law.
No one else was allowed to change the bill. (http://forum.woodenboat.com/showthread.php?167885-The-dirty-tricks-that-the-Dems-have-used-to-get-Obamacare-passed)

The point to be made by all these maneuverings is that the Democrats passed a half written bill AS IS. Much of the inner workings of the bill had to be filled in by bureaucrats. This is aptly demonstrated in the Hobby Lobby case where the requirement that employers provide contraception was not in the original bill but added later by a bureaucrat. The same thing happened with the Exchanges.

Despite clear statutory language, in 2011 the Obama administration announced it would implement those subsidies and penalties in states that did not establish Exchanges. It cited no legal authority for its decision, which sparked instant and sustained criticism, from both the public and members of Congress. The nonpartisan Congressional Research Service wrote, “A strictly textual analysis of the plain meaning of the provision would likely lead to the conclusion that the IRS’s authority to issue the premium tax credits is limited only to situations in which the taxpayer is enrolled in a state-established Exchange.”

The administration persevered, and is currently spending billions of dollars to subsidize Exchange enrollees in 34 states — two-thirds of the country — with no legal authority. Those subsidies are an important reason why Exchanges have enrolled 8 million Americans, or whatever the real number is. (2)
(1)