By Robert I. Field
Why would Congress have limited Affordable Care Act subsidies to residents of only some states – those that establish their own insurance exchanges? The law authorizes credits for the purchase of insurance “through an Exchange established by the State under section 1311.” The D.C. Circuit found that this wording excludes federally established exchanges and that Congress might have intended this to induce states to establish their own exchanges rather than letting the federal government take over.
But the Court acknowledged that there is no evidence of such intent in the legislative history. And such a purpose would conflict with the ACA’s overall goal of extending health insurance access to all Americans.
With no legislative history as a guide, is there another plausible explanation of Congressional intent? Is the best answer to the D.C. Circuit’s opinion that the phrase was a drafting error, as the dissent seems to imply? Why else would it have found its way into the law?
Inartful though it may be, the wording can be seen to serve a different purpose that is consistent with the rest of the ACA. It can be understood not as a way to distinguish exchanges established by a state from those established by the federal government but to distinguish those established publicly from those created privately.
By Jennifer S. Bard
One of the most common questions I get asked when I talk about health care reform is some version of “how is it actually going to work?” Good question. So much of the Bill was TBA while its Constitutionality was being tested that only now does it seem as if the both the insurance industry and the government are realizing that it is up to them to make this work.
For example, what, exactly is an Exchange? There’s surprisingly little information—and all of in the future tense. For example, the Kaiser Family Foundation website gives this definition: “Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance.” This is how the Government is explaining it.
But there are still a lot of missing pieces. Who decides the criteria for participation? How will “affordable” be defined? Because the issue isn’t just price—it’s what’s included in that price. We know that “Exchange” is essentially a web shopping site where people can go to study and compare different health insurance packages. The difference is that at least some of these packages will be “affordable” and there will always be some kind of “affordable” option for everyone regardless of their current health status. Beyond that, there are a lot of questions. Some states are working hard to set up exchanges, others have refused to participate and still others are still in some kind of “planning” or “study” phase. This map from the Kaiser Foundation gives a 50 state overview. As the idea of exchanges and the actual implementation of the mandate which will be the mechanism that requires consumers to use these exchanges, there is a growing awareness on the part of the government agencies responsible for running this that it will be a lot of work. For example, this article from Business Week reports concerns expressed by the Commissioner of IRS about how they are actually going to enforce the penalties. There’s already a considerable amount of hiring going in.