(Bloomberg View) -- Since the Halbig v. Burwell decision came down from the U.S. Court of Appeals for the District of Columbia Circuit -- which ruled that insurance subsidies could only legally be provided on state exchanges -- there has been a lot of outrage from the liberal commentariat. The thrust of this outrage is that obviously no one ever intended to restrict subsidies only to state exchanges, because that is now endangering the whole program, and obviously, the law’s architects did not mean to endanger the whole program.
The response to this has been twofold. First, everyone at the time assumed that all the states would establish exchanges. Second, there was indeed a method to this madness: By limiting subsidies to the state exchanges, the government was providing the incentive needed to get all 50 states and the District of Columbia to go ahead and create those exchanges.
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