On Thursday the Obama administration quietly issued a major health law fix: now individuals who bought private insurance outside of the exchanges are eligible for subsidies. Or, if you don't like Obamacare, our imperial president's lawlessness continues.
What is the fix?
Anyone in any state who bought a private insurance plan will be eligible for Obamacare subsidies, depending on their income. Previously the administration stressed that only plans purchased through the exchanges qualified for subsidies, which is what it says in the law.
As Ricardo Alonso-Zaldivar of the Associated Press reported, states with awful state-run exchanges like Maryland, Oregon, Hawaii and Massachusetts — and the Democratic governors of those states — stand to gain the most from this move, since voters who were frustrated by the poor exchanges will still qualify for subsidies.
The "lawlessness" argument
For conservative bloggers, this checks two boxes: Obama is once again issuing a legally gray change to his law and corrupt Washington Democrats are helping inept state Democrats with their broken exchanges. In other words, they're criticizing the problem (some people couldn't get subsidies because their exchange didn't work) and the solution (giving people subsidies to ease the transition into Obamacare is illegal).
The legality of subsidies has come up before, too. The Affordable Care Act states that subsidies are available to people who buy insurance through a state exchange. Some detractors have argued that subsidies shouldn't be available through the federal exchange, though the government and the courts have agreed that the law obviously meant for every state to have a subsidy-eligible exchange. More importantly, some are arguing that the administration doesn't have the authority to change one word of the law.
Hot Air asked "what jurisdiction does HHS have to make a change to tax-credit statutes, anyway?" Conservative site Human Events went one step further, calling the whole law a failure since "His Majesty King Barack I":
... can’t get through a week without making illegal modifications to the idiotic law his party stuffed down our throats. The first illegal modification should have been the end of the Affordable Care Act.
The latest one is going to cost us a bundle, it’s flagrantly against the law, and it should prompt emergency sessions of Congress to wipe out the Affordable Care Act once and for all.
The administration's defense
The opposing viewpoint is that these fixes really are fixing the law, and that is legal. After the "no really, you can keep your plan" fix in November, the administration argued that a previous Supreme Court case found that agencies have enforcement discretion with new laws to, among other things, "ensure that transitional periods do not result in undue hardship." David Vladeck, an administration law expert, agreed and told The Washington Post, “The President does have discretion not to take enforcement action when he believes it would frustrate the purpose of federal law."
The purpose of Obamacare is provide low cost health care, often through subsidies. The administration obviously intended (or at least hoped) for everyone to have access to a working exchange. Because some exchanges still don't work, and people were forced to buy insurance outside of the exchanges, the government is extending subsidies. The law is vague, though, so we wouldn't be surprised if this fix was challenged in court.
This article is from the archive of our partner The Wire.