Section 1311 tells states to establish Exchanges, that's crystal clear. Problem is it's not constitutional.
Section 1311 also defines an Exchange as "a government or nonprofit entity that is established by a state". That's also crystal clear.
Section 1321 then goes on to direct the HHS to establish "such Exchange" (as defined in 1311) if the state fails to do so. That's also crystal clear.
Then there's the problem of who is qualified to use the Exchange, the section escapes me. One of them is that a person using the Exchange must be a "resident of the state that established the Exchange". Again, crystal clear. Just one obvious problem: how could anyone qualify for a federal exchange?
And those are just the statutory arguments against the case. There are also constitutional arguments.
The most serious (and what I feel the court, or at least Roberts, is most likely to rule in the government's favor) is the question of whether that four-word passage is sufficient to provide clear notice to the states that not establishing an exchange would result in the loss of tax credits. If Congress intends to convey a threat to a state it needs to make that threat clear in express language. The only threat they ever make to the states regarding exchanges is that, if they don't do it themselves, the HHS will step in and do it for them. NOTHING was ever mentioned about withholding tax subsidies to those states.
Personally I feel that, while statutory arguments are already against the plaintiffs, the constitutional argument is going to be very difficult for the plaintiffs to overcome. My hunch is that Roberts wants to further cripple Chevron (not the ACA) and this case gives him the perfect cover to do it.
And finally, even IF in the very unlikely scenario the plaintiffs win, if you interpret the ACA down to the very last letter of the law exchanges could be established in other states for those states that refuse to do it themselves. Now doing THAT would require a very strained, extremely strict to-the-letter reading of the law, but if the court rules in favor of the plaintiffs the only way the court could do it is by doing the same thing. But I really doubt it will ever come to that.
Read some of the amici briefs submitted for the government's side. The SEIU's brief is my favorite:
http://b.3cdn.net/seiumaster/29f219ac2d3268bbd5_cbm6b54je.pdf
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