In one of their last ploys to undercut Obamacare before it becomes firmly entrenched, conservatives are arguing that people who purchase coverage through HealthCare.gov shouldn’t be allowed to receive financial help from the law.
They insist Congress intended for the assistance to be available only through state-run websites as a way of forcing states to create them. The only problem is: The people who actually wrote the law say they’re wrong.
Two staff-level sources directly involved in drafting the law told TPM that no one intended to block subsidies from being administered through the federal website. Instead, they blame the poorly worded phrase on which conservative have based their case on the unusual legislative process through which Obamacare became law.
“I don’t even understand how the question is being asked,” one source said, “except you could go through the law and find all sorts of issues that probably could have been drafted clearer. I think the opponents of health reform are just scanning for inconsistencies and poorly drafted language and trying to exploit them.”
“It never crossed anyone’s mind that tax credits couldn’t be accessed through the federal exchange,” a second source told TPM, “because that would make no sense and isn’t consistent with the clear intent and structure of the statute.”
The conservative argument, presented in a lawsuit brought by a coalition of individuals and businesses, relies on the language of the Affordable Care Act itself. The particular wording of the statute, they claim, prohibits tax subsidies from being administered through the federal website. The IRS has ruled that Congress intended for the tax subsidies to be available through HealthCare.gov and begun to administer them.
The critics point to the language in the law explaining how to calculate a tax subsidy under the law, which says the person must have “enrolled in through an Exchange established by the State,” but doesn’t explicitly reference an exchange (the technical term for the insurance websites) set up by the federal government.
HealthCare.gov serves 36 states; with more than half of those applying for coverage being found eligible for subsidies, it would be a significant blow to the law’s coverage and affordability goals if those subsidies were stopped.
The case is scheduled to be heard by a federal appeals court in March after a U.S. district judge refused to block the subsidies last month. Several prominent congressional conservatives and Republican state attorneys general have written “friend of the court” briefs in support of halting the financial help offered under Obamacare.
But some of the top Democratic senators who oversaw the ACA’s creation have said that they always intended for tax credits to be accessed through the federal website.
“They’re available in both,” Sen. Tom Harkin (D-IA), who chairs one of the two committees most involved in the law’s drafting, told NPR in 2012 when the issue was initially being raised. “My advice to Republicans is get over it. The law is the law and we’re moving ahead with it. Quit trying to scare people.”
The U.S. district judge who ruled against the plaintiffs in January quoted then-Sen. Max Baucus (D-MT), the other primary architect of the law, as part of his decision to allow subsidies to continue through HealthCare.gov. While the bill was being crafted in 2009, Baucus said that the law “fundamentally gives states the choice to participate in the exchanges themselves or, if they do not choose to do so, to allow the federal government to set up the exchanges.”
Those comments don’t have the force of law in the lawsuit being advanced by conservatives. But considering the administrative decision that is being challenged was based on what Baucus and his colleagues intended when they passed the health care reform law, they’re notable nonetheless.
The conservative argument, which originated with a research paper by two conservative scholars released in July 2012, is that the law’s wording doesn’t allow for tax credits through a federal website — regardless of what Baucus and the involved congressional staffers say. The ACA’s language is unambiguous, they said, and can’t be read to allow tax credits through HealthCare.gov.
But Obamacare has plenty of drafting errors because of its messy passage through Congress, which never included a conference between the House and Senate where that kind of poor drafting might have been fixed, TPM’s sources said. That was the result of Republican Scott Brown’s January 2010 election to the Senate, following the August 2009 death of Sen. Edward Kennedy (D-MA).
Brown gave Republicans enough votes to block normal passage of the law and forced Democratic leadership to pass the bill through unconventional legislative procedures, which left some less-than-desirable wording through the more than 900-page law that couldn’t be changed, they said.
That doesn’t mean that the drafters wanted to stop people from receiving financial help, the sources said, contrary to the conservative argument that the language was intended to force states to establish their own websites. They also observed that the Congressional Budget Office scored the legislation as if people would be eligible for subsidies in all 50 states, regardless of what exchange they used.
“We meant to clean it up in conference, but we never got to conference,” one of the sources said. “It’s definitely inartfully drafted.”