ObamaCare's Next Legal Challenge

◼ The law says subsidies can only go through state-run exchanges. - SCOTT PRUITT/Wall St. Journal

While the president's health law is vast and extraordinarily complex, it is in one respect very simple. Subsidies are only to be made available, and tax penalties for not signing up for health insurance are only to be assessed, in states that create their own health-care exchange. The IRS, however, is attempting to enforce tax penalties in all states—including Oklahoma and the majority of the other states that have declined to create their own exchanges. Citizens and businesses in these states must use the federal exchange instead.

The distinction is critical, because under the terms of the law it is the availability of government insurance-premium subsidies that triggers the penalties against businesses if they fail to provide their employees with health insurance that the administration deems acceptable. This is a huge problem for the administration, which desperately needs to hand out tax credits and subsidies to the citizenry to quash the swelling backlash against the law....

While much time has been devoted in Washington to the issue of "defunding" the Affordable Care Act, the success of these lawsuits would have much the same effect. Should the courts decide the IRS is exceeding its authority and isn't allowed to assess the employer penalties in states that have not established their own exchanges, the structure of the ACA will crumble—as one of the primary mechanisms the federal government has employed to force people into the health-insurance market evaporates.

As much as we wish the government were run like a business, the administration cannot "improve" upon legislation passed by Congress by rolling out updates in the manner that Silicon Valley does. That's not permitted under the Constitution: Congress passes laws, the president executes them. Period. That's why Oklahoma and other states are fighting to stop the administration's attempt to "fix" the health-care law through executive fiat.