Some Background
Vox.com
My pre-Opinion take:
How it happened
This was not a typo or a drafting mistake. There were some Democrats at some point who believed this language would push states to create their own exchanges (Gruber has made that clear). I also believe if you asked every Democrat individually upon signing it, that they would have expressed this opinion. But most of the Democrats who signed it did not intend for that language to exist in the final bill, and this also supports the idea that maybe if they had read what they were signing, or had more time to deliberate, they would have fixed it first. Secondly, why didn't the President notice this problem when he signed it? Another likely possibility was that no one really intended for this bill to make it to the President but it would likely have to be combined with a separate House version in a joint committee, but the Democrats lost the Senate Super-majority and so had to go with it.
I also believe that this clear language is at odds with the intent of the rest of the bill. I believe that most Democrats thought that citizens in states that chose not to create their own exchange would still be eligible for federal subsidies and that much of the rest of the bill is written with that intent in mind.
However, the question here is when a bill contains clear language that doesn't literally contradict other parts of the bill, but just doesn't seem to fit with the remainder of the bill, does the executive branch have the authority to ignore that? Past court cases have said that when language is vague, the executive branch can fill in the blanks. I don't know if there have been cases about literal contradictions, but I can see that the executive would have the authority to pick one. But this case is different in that the language is not vague and it is not directly contradicted--it's a circumstantial contradiction.
My belief is that the literal text is the primary authority in legislation. That goes for the Constitution as well. The less we rely on literal text, the more our laws are subject to the whims of individuals, not democracy. I want to live in a world where the rules are clear. And if judges and the executive have the power to say, well, it says if you make so much money, you have to pay so many taxes, but surely that wasn't meant to apply to politicians, then they have the power to ignore any law as written, and then we no longer have the rule of law.
Legislators have a responsibility to make the law as clear as possible, but sometimes they're vague, and the executors of the law have to interpret and enforce them. After literal, the next aspect to look at is the intent of the law. This gets a little fuzzier. How can you know what the legislators intended to do when they wrote this law? Often, they may have intended different things and were deliberately vague so that the law can pass: if everyone reads their own aims into it, more will vote for it. I'm convinced that politicians bank on that often.
The alternative to intentions is what the judge thinks is right. This is the worst criterion because it substitutes a small coterie of people selected for their adherence to the selector's opinions (and sometimes for characteristics other than the content of their character such as their skin color or gender) for democratically elected representatives of the entire population.
Consider this: who is the most powerful person in the United States? I suggest that it is the swing vote on the Supreme Court, as he is the ultimate arbiter of the law. If he says gay marriage is legal, then nothing else can be done. It is legal. No one else, not even the President, has that ability. I am extremely uncomfortable with entrusting so much power into so few hands.
Standing: As with many Leftist policies, standing seems to be tricky to get. You have to find someone harmed by subsidies provided to people living in a state with no state exchange. Generally, since the Left tends to give other people's money away, and you can't claim harm from being a taxpayer, no one is harmed. However, in this case, four people from Virginia were on the edge of the mandate. So it worked like this: Ordinarily, everyone has to purchase insurance because of the coverage mandate. However, if your income is low enough, you're not subject to the mandate. For the four gentlemen bringing suit, however, the subsidies that the government was providing them would put their income above the threshold and they would be required to purchase insurance. Since the insurance would cost more than the subsidy, the subsidy harmed them.