How brain cancer harmed the ACA

For the second time in three years, the Supreme Court is poised to rule on whether a critical piece of the Affordable Care Act is constitutional.

In the case now before the Court, at issue is whether the IRS exceeded its authority in issuing regulations which interpreted that it was the intent of Congress to allow people eligible for subsidies to obtain them when enrolling through a federal government-run exchange instead of a state-government run exchange.

{mosads}My own view is that, while at one point allowing subsidies in states that erected exchanges would be a carrot to entice them to do so, by the time the Senate passed its version of the bill, that concept had been largely abandoned because, ironically, it was perceived to perhaps tempt a constitutional challenge by treating taxpayers in the various states differently under the tax code. 

But Congressional leaders got spooked when  former Sen. Scott Brown (R-Mass.) won former Sen. Ted Kennedy’s (D-Mass.) seat, and decided not to hold a conference with the House, but to simply bring up the Senate passed bill for a vote on the House floor.  Instead of the traditional horde of staff and lawyers poring over every line of the legislation to make sure it reflected the views of its authors, it was left to the smart and capable, but understaffed Kate Leone, Harry Reid’s health policy adviser (and presumably a small team of lawyers from the Office of Legislative Counsel) to “merge” the Senate Finance Committee bill with the Senate HELP Committee into the product that was passed by both chambers.  I believe the typical conference exercise may well have uncovered the fact that the language in the section providing the credit had not been updated to clarify that subsidies were also available in states in which the federal government was operating the exchange, presuming that was indeed the policy the authors wanted.  Instead, it was left to my friend Michael Cannon at the Cato Institute to discover it, and Mr. King and his colleagues to litigate the ability of IRS to interpret intent without specific words.

Earlier this week, my former boss, former Secretary of Health and Human Services Mike Leavitt along a handful of my former colleagues from HHS, released a memo to governors with four options if the Court were to rule in favor of King.  I found the third option – putting pressure on Congress and the President to fix the law should the Court rule for the plaintiffs — to be inadequate.  It did not spell out a solution, nor did it aggressively call on the president and Congress to work together to find a solution if King wins and people in states where the federal exchange is operating start losing their insurance because they can no longer afford it without subsidies.

To the extent the two parties in the King case are arguing about whether people who qualify for tax subsidies should receive them when enrolling in coverage through a federal government-run or through a state government-run exchange, here’s my answer: Neither!

Under the ACA, if you earn more than 400 percent of the federal poverty level you have the freedom to choose where you go to enroll in your mandate-meeting health insurance. You can do so at a government exchange, directly from a carrier, from a traditional agent or broker, or from a private health insurance online marketplace.  But, if you earn less than that, and you qualify for subsidies, the ACA says you must enroll through a government exchange.  Why?  Are people who earn less than 400 percent of FPL less capable of making an informed choice about their enrollment?  Why should wealthier Americans have more enrollment options than those who qualify for subsidies?

Here’s my proposed legislative solution if the Court rules for King.  Congress should pass legislation that allows people who qualify for subsidies to get them wherever they want: from a government exchange, from a private exchange, from their cousin or uncle who is an insurance broker, or directly from the insurance company.  Then let Obama explain why people who earn less should have fewer choices.

Republicans are afraid that the President will hold up a sheet of paper and say, why doesn’t Congress just pass a bill with these four words and solve the problem?  The answer is that the makeup of Congress has changed since 2010 – some would argue in no small part due to the partisan way in which the ACA was passed.  So if the American voter has “updated” the Congress, then any solution that Congress passes to fix the ACA ought to necessarily somewhat reflect that update.

Personally, I blame brain cancer.  If Ted Kennedy had not succumbed to it, he would have insisted that any Senate bill have at least a handful of Republican votes – even if he had to vote against it.  Doing so would have necessitated a conference with the House, and many of the key mistakes in the ACA might have been avoided.

Desser is a former HHS deputy assistant secretary for health policy and currently vice president of Public Policy for eHealth, Inc., a private sector online health insurance marketplace.