Top Republican critics of the new health care law have put their clout behind a lawsuit that seeks to cut off Obamacare’s insurance subsidies to two thirds of the states.
Six senators and two House leaders filed a friend-of-the-court brief in support of several businesses and individuals who sued the Obama administration over the subsidies, saying the Affordable Care Act clearly states that financial assistance should flow to people who seek health plans on an exchange “established by the state.”
“To judicially amend that provision now would change the terms of the deal, striking a new bargain that Congress did not and could not have struck,” they wrote.
Only 16 states and the District of Columbia decided to set up their own insurance exchanges under the law, while the rest decided to let the federal government to do it for them.
Plaintiffs in Halbig v. Sebelius say the IRS unlawfully extended tax credits to people on the federal portal, known as HealthCare.gov, when it issued an administrative rule after the law’s passage. If their lawsuit proves successful, millions of Americans could no longer collect taxpayer subsidies to help them buy insurance — a key element to making the new law work.
The plaintiffs lost at the trial level last month, prompting an appeal before the U.S. Court of Appeals for the D.C. Circuit.
Sens. John Cornyn and Ted Cruz of Texas, Orrin G. Hatch and Mike Lee of Utah, Rob Portman of Ohio and Marco Rubio of Florida said in their brief to the appeals court that they have “a distinct perspective on how courts should interpret the statutes they write,” and they feel that the Obama administration usurped Congress’ authority in its rule making.
House Ways and Means Committee Chairman Dave Camp, Michigan Republican, and House Oversight and Government Reform Committee Darrell E. Issa, California Republican, joined in the brief.
Last week, Mr. Issa’s committee released a report that argued the Obama administration did not carefully review the health care law’s text and meaning before issuing the rule to ensure that tax credits flowed to all those participating in the exchanges.
The law’s exchanges, launched in October, are a crucial piece of President Obama’s reforms that allow people on the individual market to compare plans and qualify for income-based subsidies to defray the costs of coverage.
The Obama administration said the government never intended to treat residents of some states differently than others, and that the secretary of the Department of Health and Human Services “stands in the shoes of” states that opt not to run their exchanges.
U.S. District Court Paul L. Friedman sided with the government in mid-January, setting the stage for a second round in the appeals courts.
“The district court’s decision is especially troubling, because it effectively rewrites the plain text of a provision that was the specific subject of extensive negotiations in the Senate — negotiations that culminated in a compromise that made the ACA’s enactment possible,” the GOP lawmakers wrote.
They also took a shot at the Obama administration’s botched Web rollout of HealthCare.gov last fall.
“Recent events illustrate why others might have preferred that the federal government stay out of the complex, politically fraught business of operating an exchange,” they wrote.
Employers who sued over the rule say the subsidies expose them to the law’s employer mandate, which kicks in next year and requires employers of 50 or more full-time workers to provide health coverage or pay fines. The mandate is triggered when at least one employee takes advantage of the subsidies on an Obamacare exchange.
Officials from Kansas, Nebraska and Michigan wrote in a separate brief to the court that they, as state employers, were impacted by the mandate — particularly a provision that defines a full-time worker deserving of health coverage as someone who works at least 30 hours per week.
“The substantial financial burden of the employer mandate would deeply influence a host of state and local public policy decisions as those governments seek to maximize the impact of their improving, but still-tight budgets,” they said.
A plaintiff from West Virginia said he would have qualified for a financial hardship exemption from the law’s individual mandate, which requires almost all Americans to have health insurance. But the availability of a subsidy in his state canceled out that exemption, he said, forcing him to buy coverage he doesn’t want.