IRS, Democrats defend administration’s decision to extend subsidies to all exchanges
The Obama administration cannot legally offer federal subsidies to help people buy insurance on federally run health insurance exchanges, legal experts and Congressional Republicans argued Wednesday, potentially threatening the central feature of Obamacare.
Obamacare mandates that each state have a health insurance exchange where people can buy insurance, and the federal government is providing subsidies to help qualifying people buy health insurance on these exchanges.
The law says that the government can provide subsidies for insurance sold on an “Exchange established by the state.” Thirty-four states have refused to set up their own exchanges, leaving the federal government set them instead.
The Obama administration has interpreted the law to allow them to offer subsidies to people buying insurance on exchanges run by the federal government as well as the state governments.
Both legal experts and Republicans on the health care subcommittee of the House Oversight Committee contended that the administration’s implementation of the subsidy provision is beyond the scope of the law and Congress’s intent.
“At issue today is an example of the administration rewriting the law to meet political objectives,” said subcommittee chairman James Lankford (R., Okla.).
Congress originally limited the subsidy only to state-created exchanges to induce the states to set up their own exchanges, argued Jonathan Adler, a law professor at Case Western Reserve University.
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