The story of whether Congress ever intended to limit Obamacare subsidies to state-based exchanges begins and ends with the Congressional Budget Office. And what it reveals about the latest legal threat to Obamacare dramatically undercuts the arguments against the law.
No one person or institution was more central to the debate over Obamacare than the CBO. Every tweak to the law was funneled through the accounting brains of the non-partisan congressional scorekeeper to determine how much it would cost. Passage of the entire law hinged on its reports. Votes were delayed until CBO could finish its scoring. Specific provisions lived or died by its decrees. It is safe to say that the health care reform law we have today is in large part the result of the CBO's work.
But like everybody else on Capitol Hill in 2009 and 2010, from legislators to the journalists who covered them, the CBO's quants never even considered the scenario that Obamacare faces today. A federal appeals court has ruled in Halbig v. Burwell that the law's crucial subsidies are not available on the federal insurance exchange, HealthCare.gov, putting coverage for nearly 5 million people in 36 states at risk. That outcome, as bad as it would be for the uninsured, would dramatically lower the cost of Obamacare -- but the CBO never entertained that possibility for the same reason no one else did: It was not how the law was supposed to work.
Remember: Billions of dollars were at stake and everybody was watching. If the costs of Obamacare subsidies could shift by billions of dollars depending on whether a state built its own exchange or instead used the federal exchange, the CBO would have been the one to know about it. And you can bet that the nervous Obama White House, wavering Democrats, and eager-to-pounce Republicans would have responded if the CBO had interpreted any provision of the bill as putting subsidies at risk to state decision-making and put a figure on the financial fallout of that possible scenario. But that alternative picture of the law's costs was never created because nobody at the time understood the law to work that way.
Many of the journalists who followed the debate have retraced their steps, Jonathan Cohn of The New Republic and Sarah Kliff of Vox to name just two, arguing that their experiences, particularly talking with members and their staff during the legislative debate, shows that this legal challenge has no basis in reality and history. But it's even more than that. Not only did the legislators themselves never intend to cut out subsidies for the federal exchange, the CBO, that all-important arbiter of the law's costs, never once factored it into its analyses.
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