Could missing word kill the ACA? No.

Health reform legal expert Timothy Jost says latest perceived threat to survival of health reform law is just another costly distraction

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  • healthinsurance.org Contributor
  • July 17, 2012

Controversy over a missing word in the health reform law is the latest tempest in a teapot the GOP is brewing to derail health care reform.

Note to readers: I welcome reader comments and questions, and will try my best to reply in a timely manner. I ask only that you do your part to keep our discussion both reasoned and polite. – MM

Inevitably, opponents of the Affordable Care Act will continue to hunt for ways to undermine reform, says Washington & Lee law professor Timothy Jost, though “they may be shooting themselves in the foot.”

A frequent contributor to Health Affairs, Jost is widely regarded as one of very few commentators who knows both the law and health reform legislation – in depth and in detail.

Below Jost assesses strategies opponents are pursuing as they try to subvert universal coverage.

Q. The ACA creates exchanges where individuals can purchase insurance, and the Congressional Budget Office (CBO) has predicted that roughly two-thirds of the 23 million people who shop there will receive subsidies averaging $6,000 each. But now conservatives are claiming that when Congress drafted the law, it bungled the wording.

The ACA refers to “state run” exchanges. Many states won’t have exchanges set up by 2014; the federal government will have to do it for them. The nit-pickers contend that the government will not be able to provide subsidies in these “federal exchanges.” And without subsidies, they say, reform will fail.

Yesterday, the Washington Post’s Wonkblog ran a column headlined: “Could a missing word take down Obamacare?” It ends by saying “This idea may catch on. Or it may flop.”  Is this true – legally, do they have a case?

A. It’s quite clear that Congress intended to provide credits in federal exchanges. Section 1311 of the law calls for states to establish health insurance exchanges. But section 1321 provides for federal exchanges to function as state exchanges in states that can’t or won’t set them up.. The Center on Budget and Policy Priorities (CBPP) has just issued a report detailing how the conservatives’ argument rests on a “distorted” reading of the law.

Q. So is this just a “tempest in a teapot?”

A. Yes and no. The opponents will probably file a lawsuit and shop for a judge who will be sympathetic to their position. I could see a conservative judge saying, with malicious glee, “Congress screwed up – I’m going to shove it to them.”

Q. But ultimately, these suits will never “take down” Obamacare.

A. That’s right. Generally when legislation is ambiguous, it’s up to administrative agencies to interpret it – in this case, as the CBPP explains, that would be the Treasury Department. In the end, this will get straightened out. It’s just one more hiccup along the way.

Q. We’re told that the House’s many failed attempts to repeal the ACA have taken up 80 hours of legislators’ time, costing taxpayers $48 million. Won’t these lawsuits cost taxpayers more money?

A. Yes. The public is getting tired of this – I wonder if conservatives aren’t just shooting themselves in the foot. I wish they would step outside and realize that it’s hotter than it used to be. Maybe there is something we should try to do about that.

Q. The ACA also calls for expanding Medicaid to include some 16 to17 million low-income Americans. Washington will provide all of the funding for 3 years, 90 percent thereafter. But now five Republican governors have said they’ll take the money only if the feds give them block grants – with no strings attached. This means they could throw out required benefits, change eligibility requirements, or demand co-pays.  Will the administration agree?

A. No. The Supreme Court ruled that the states had the choice of taking the Medicaid expansion, under the terms of the ACA, or not. It made no provision for turning Medicaid into a block grant, and indeed the administration could not do that without new Medicaid legislation. The administration doesn’t have constitutional authority to block grant Medicaid.

Q. Other states, including Texas and Florida, are saying that they won’t expand Medicaid under any circumstances. But won’t low-income people in those states be able to apply for subsidies?

A. No, the subsidies don’t apply to people with incomes below the federal poverty level – they are available only to those with incomes between 100 and 400 percent of the FPL. And in most states the poor are eligible for Medicaid only if they are disabled or have children. If governors like Florida’s Rick Perry have their way, millions of single people and childless couples will be left out.

Q. Eventually, won’t all of the states get on board?

A. They will be under tremendous pressure from hospitals and managed care companies to take the money. But in the case of SCHIP, the program that covers poor children, some states held out for a year or so.

Q. If governors dig in their heels won’t some be voted out of office?

A. In Florida, Rick Scott’s approval rating has fallen to around 40 percent. People are realizing they made a mistake. Just the other day I got a call from someone who said: ” I saw you quoted in the paper – do you really think some states won’t set up exchanges? I’m thinking of moving to Florida – but now I think Rick Scott is a sociopath. I’m not sure I want to live there …”

Q. He’s calling because he wants your advice on whether he should move? What did you say?

A. I told him, “Just stay where you are. Soon it will be as warm as Florida.”


Maggie Mahar is an author and financial journalist who has written extensively about the American health care system. Her book, Money-Driven Medicine: The Real Reason Health Care Costs So Much, was the inspiration for the documentary, Money Driven Medicine. She is a prolific blogger, writing most recently for TIME’s Moneyland. Previous work for the Health Insurance Resource Center includes Today, the Supremes sang. She also provides background on Congressional health care legislation for HealthReformVotes.org, a special project of the Health Insurance Resource Center.

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