The latest outrage about the ACA is the agreement reached that will allow members of Congress and their staff to receive an employer contribution to buy insurance from ACA marketplaces (used to be called exchanges). If they didn’t get the same contribution from their employer (the federal government) that other federal employees get, then many staff and all members of Congress would have to pay the full freight of their insurance since their income would be above the level that would provide an income-based subisidy as provided by the ACA. Michael Cannon, for example says this is illegal, and amounts to a special deal that is a politically motivated attempt to keep Congress from re-opening the ACA.
Michael has made similar charges about illegal implementation of other aspects of the ACA, here is a detailed 79 page paper with Jonathan Adler (free download) arguing that the decision by the IRS to allow income based premium subsidies to flow to persons purchasing health insurance in federally-run state exchanges (like in North Carolina) is illegal. His co-authored paper is a very detailed argument (essentially a legal brief provided to ongoing litigation), and I assigned it for an undergrad class at Duke last Fall. The students had to write a paper deciding whether the implementation decision regarding federally run exchanges was indeed wrong as Michael argues (he also guest lectured in the class, and clearly and forcefully made his case to the students). Most of the students were not persuaded by Cannon, but some were (3 said such premium subsidies were clearly not allowed and illegal; 18 said they were allowed, and 4 had more nuanced views that essentially said they thought they were not allowed but that the IRS has lots of leeway in such cases). The point is about 25% of a group of very smart people bought Cannon’s arguments when looking closely, while 75% did.
One big difference in this latest outrage is the lack of a textual analysis done by Cannon (at least that I can find). I think that is because of what the text actually says in this case (Section 1312(d)(3)(D)).
The Office of Personnel Management (who deals with HR issues for federal employees) has issued this rule that requires members of Congress and their staff to buy insurance from the ACA marketplaces (as the ACA plainly says must occur), while having the same contribution towards their insurance that would otherwise be provided for their employer sponsored insurance still flow; they pay the difference. The text is silent about whether members of Congress and/or staff should still get their employer contribution toward insurance or not, and given that it seems a reasonable decision.
A bit more context enlightens further. This provision of the ACA was a Republican Amendment (offered by Sen Grassley, R-Iowa) in the Senate that was designed to embarrass the Democrats who the Republicans presumed would vote down this amendment. However, they agreed to it, and the text above is what the Senate agreed to (I think it passed 99-0). It is an odd amendment because employees of large employers (those with over 50 employees) are explicitly not permitted to purchase health insurance from the ACA marketplaces, but this section says that a subset of employees of the largest employer in the U.S. must purchase insurance in the marketplaces.
The case against this provision is weaker than is the other noted above (though I don’t agree with Michael on that one either). However, it is August, the season of town hall meetings, when the national outrage meter is set to 11, and the logic gives way to the noise.
cross posted at freeforall