Rember when then Speaker of the House Nancy Pelosi said “We Have to Pass the Bill So That You Can Find Out What Is In It”? Well they passed Obamacare and we’re quickly discovering that it is deeply flawed piece of legislation.
Health and Human Services Secretary Kathleen Sebelius has already suspended indefinitely implementation of the CLASS act — Obamacare’s Long-Term-Care Entitlement because it was financially unsustainable.
And as Jonathan Adler and Michael Cannon explain in today’s Wall Street Journal Obamacare has yet another major flaw that threatens its basic functioning:
Even if ObamaCare survives Supreme Court scrutiny next spring, its trials will be far from over. That’s because the law has a major glitch that threatens its basic functioning. It’s so problematic, in fact, that the Obama administration is now brazenly trying to rewrite the law without involving Congress.
The Patient Protection and Affordable Care Act offers “premium assistance”—tax credits and subsidies—to households purchasing coverage through new health-insurance exchanges. This assistance was designed to hide a portion of the law’s cost to individuals by reducing the premium hikes that individuals will face after ObamaCare goes into effect in 2014. (If consumers face the law’s full cost, support for repeal will grow.)
The law encourages states to create health-insurance exchanges, but it permits Washington to create them if states decline. So far, only 17 states have passed legislation to create an exchange.
This is where the glitch comes in: ObamaCare authorizes premium assistance in state-run exchanges (Section 1311) but not federal ones (Section 1321). In other words, states that refuse to create an exchange can block much of ObamaCare’s spending and practically force Congress to reopen the law for revisions.
The Obama administration wants to avoid that legislative debacle, so this summer it proposed an IRS rule to offer premium assistance in all exchanges “whether established under section 1311 or 1321.” On Nov. 17 the IRS will hold a public hearing on that proposal. According to a Treasury Department spokeswoman, the administration is “confident” that offering premium assistance where Congress has not authorized it “is consistent with the intent of the law and our ability to interpret and implement it.”
Mr. Adler and Mr. Cannon rightly point out the law’s proponents confidence is misplaced… Federal agencies can create rules — but they cannot amend or ignore statutes and the text of the law is perfectly clear, it does not allow premium assistance in federal exchanges.
Simply put without congressional authorization, the IRS lacks the authority to dispense tax credits or spend money… Not that has ever stopped Washington’s regulators from ignoring the will of Congress – just look at Avenal Power Center, L.L.C. v. EPA.
Anyway, the odds that a Republican controlled House will fix a fatal flaw in Obamacare are somewhere around slim and none… the odds aren’t much in the Senate either where many Democrats are facing tough reelection fights and aren’t going to want to go anywhere near one of the most unpopular and polarizing pieces of legislation in recent memory — especially after the trouncing they took in the mid-terms.
Bottom line, the Obama Administration will undoubtedly try to push through their regulatory fix for this flaw only to see it almost instantaneously tossed out in a court challenge.