States hoping to establish their own isurance exchanges should the Supreme Court rule tax subsidies legal only in states that set up their own marketplaces will face technical challenges. A handful may face legal challenges as well.
Specifically, five states--Alabama, Arizona, Ohio, Oklahoma and Wyoming--passed anti-Affordable Care Act amendments to their state constitutions over the past few years, according to the National Conference of State Legislatures. While the amendments don't technically prohibit these states from establishing their own exchanges, they pose an interesting legal question.
Ohio's amendment, for example, forbids any state or federal law from compelling residents to participate in a healthcare system. For now, this is irrelevant, since the U.S. Constitution's Supremacy Clause mandates that the ACA overrides any state-level measure to stop it, reported the National Journal.
It wouldn't matter if the Supreme Court struck down the subsidies, either. If there are no tax credits to be offered, then there are no penalties for employers who don't comply with the employer mandate or individuals who don't comply with the individual mandate, the Journal said.
However, residents would be subject to potential penalties if their states already have or decide to set up their own exchanges.
In Ohio and the other four states, this could be problematic. The anti-ACA amendments--passed as symbolic opposition to healthcare reform and little else--may leave the states unable to fix the healthcare reform law within their borders.
"Ohioans created a likely insurmountable legal hurdle to state officials implementing Obamacare in Ohio through an Obamacare-compliant state healthcare exchange," the 1851 Center for Constitutional Law in Columbus argued back in 2012, noted the National Journal. The group claimed that Ohio's constitutional amendment prevented the state from establishing an exchange.
Opponents of the ACA believe that states' amendments are worded in a way that provides their governors with flexibility, Nicholas Bagley, a law professor at the University of Michigan told the National Journal.