Civitas Review

Obamacare Comedy of Errors Continue

By | Posted in Healthcare |

Due to another glitch in Obamacare, people who buy health insurance through a federally run exchange may not be eligible for premium subsidies.  Under the federal statute, insurance subsidies will be paid to individuals enrolled “through an exchange established by the state.”  However, if a state does not establish an exchange or if the federal government doesn’t approve the state’s exchange, the federal government will step in and establish an exchange on the state’s behalf.  The statute is silent as to what happens if the feds run the exchange and not the state when establishing premium subsidy eligibility.

Because Obamacare forces individuals to maintain health insurance, people with incomes between 100 percent and 400 percent of the federal poverty line will be eligible for taxpayer-funded subsidies – essentially a tax credit to help cover the premium costs.

With this latest glitch, there are a few possible scenarios:

(1) Individuals who cannot afford insurance will be forced to purchase it under the individual mandate provision.  But, if they are enrolled in a federally-run exchange and not a state exchange, they will not be eligible for any subsidies.

(2) States may be forced to create exchanges to ensure subsidies are available even though the constitutionality of Obamacare is still uncertain.   Many states have held off on implementing an exchange because if the entire law is found unconstitutional, states would like to avoid wasting valuable resources to study and set up an unnecessary and anti-free market exchange.  The exchanges will not establish private health insurance exchanges but rather stifle a real market-driven system from existing.

(3) The Obama Administration attempts to skirt around the language of the statute.  While the plain text of the statute clearly states the subsidy is only available to people enrolled in state exchanges, the Administration may try to stretch the language to include any exchange, and not just state exchanges.  This attempt wouldn’t be the first time the Administration attempted to modify plain statute text.  The Administration has previously released regulations regarding coverage of “children” until age 26 and kept Members of Congress under their current health coverage despite the doubt of authority to do so.

The good news is that this complication may allow states to block Obamacare’s new entitlement subsidy by refusing to set up an exchange and decreasing federal spending.  The bad news is, given the Obama Administration’s track record, they will find a way through quasi-legal regulations to force states to comply.

2 Comments on this post

  • Jeff says:
    Sep 08 at 12:51

    That's good, just one more step to a liberal pushed totalitarian ran country. Freedoms were nice when we had them but all good things must come to a end.

  • Joe Coletti says:
    Sep 09 at 23:06

    States can't be forced to create health insurance exchanges. This glitch simply gives states another reason to refuse, especially since the law didn't set aside enough money to create a federal exchange. Which helps explain why federal HHS is now talking about implementation in 2015 instead of 2014.

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