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A couple of weeks before President Obama's big immigration dictate, his IRS issued a more quiet but no less outrageous edict that attempts to up-end the ability of states to opt out of his health care law's new entitlement.

When the law was written, its supporters assumed states would be eager to participate and get access to enormous subsidies from federal taxpayers. Instead, more than half the states challenged the constitutionality of the law in court, and at least that many are likely to refuse to set up the so-called exchanges through which the new entitlement subsidies flow.

Now the IRS, likely at the direction of an Obama White House increasingly concerned that the whole law will crumble due to the number of states opting out, is scrambling to bureaucratically rewrite the law and allow subsidies to flow through federal exchanges.

IRS Health Care Power Grab Tramples States
By Phil Kerpen

A couple of weeks before President Obama's big immigration dictate, his IRS issued a more quiet but no less outrageous edict that attempts to up-end the ability of states to opt out of his health care law's new entitlement.

When the law was written, its supporters assumed states would be eager to participate and get access to enormous subsidies from federal taxpayers. Instead, more than half the states challenged the constitutionality of the law in court, and at least that many are likely to refuse to set up the so-called exchanges through which the new entitlement subsidies flow.

So the Obama administration is trying to bribe states to participate by manipulating language in the law that is meant to authorize start-up grants to instead fund years of operating expenses. A recent announcement from the Department of Health and Human Services (HHS) offered states six full years of funding.

Even that bribe isn't convincing many states that are flatly refusing to implement exchanges — which are subject to onerous regulatory control by HHS.

The statute does, under section 1321, authorize HHS to create federal exchanges in states that choose not to participate. But the law specifically denies taxpayers in those states "premium assistance credits," the subsidies at the heart of the new health care entitlement. This was supposed to be a way to coerce states into playing along — the Democrats who wrote the bill just couldn't imagine a state leaving billions in federal subsidies on the table. The author of the provisions, Senator Max Baucus, has reportedly stated that this was an intended feature of the law.

Now the IRS, likely at the direction of an Obama White House increasingly concerned that the whole law will crumble due to the number of states opting out, is scrambling to bureaucratically rewrite the law and allow subsidies to flow through federal exchanges.

The IRS, in a May 23 dictate, had the nerve to say: "The statutory language of section 36B and other provisions of the Affordable Care Act...