By Shannon Knutsen
In 2013, the big Obamacare lie was “If you like your plan, you can keep your plan.”
This year, the big lie about the Affordable Care act is … well… that it’s “Affordable.”
In April 2011 the IRS issued a ruling that extended the Obamacare premium subsidies to both the Federal and State exchanges. The controversial IRS rule has been the subject of several court decisions and is slated to be ruled upon by the US Supreme Court.
In October, an Oklahoma Federal judge agreed with the State’s Attorney General, Scott Pruitt, ruling against the Obama Administration. U.S. District Judge Ronald White called the implementation of the subsidies “invalid” and an “abuse of discretion” on behalf of the Federal government.
Judge White determined that the Obamacare law, as written, is meant to LIMIT subsidies and tax credits to the States that have created their OWN health care exchanges.
Only 16 of our 50 States meet this requirement, meaning ONLY Americans in those 16 states are eligible for help paying for their Obamacare.
The subsidies offset the cost of Obamacare for millions of Americans. Without them, the mandated health care under the Affordable Care Act will no longer be affordable.
A joint report issued in early 2014 by the House ‘Oversight’ and ‘Ways and Means’ committees blasted the Treasury Dept and IRS for negligence while implementing this crucial part of the Affordable Care Act (PPACA) regarding premium subsidies.
The scathing House Committees’ report reaffirms the OK Court’s decision and reveals “inexcusable” failures by senior officials at the Treasury department and the IRS Chief Counsel’s office.
After an 18 month-long dual investigation into the IRS ruling, the Ways & Means and Oversight Committees acquired evidence that:
… indicates that neither IRS nor the Treasury Department conducted a serious or thorough analysis of the PPACA statute or the law’s legislative history with respect to the government’s authority to provide premium subsidies in exchanges established by the federal government.
According to the findings, Treasury and IRS officials didn’t just misinterpret that portion of the Obamacare law; they failed to even consider it. The Committees’ report revealed that:
There is simply no evidence that IRS conducted an adequate analysis of this issue prior to the issuance of the proposed rule.
On three separate occasions, IRS and Treasury employees were unable to provide the Committees with detailed information about the factors they considered before determining that premium subsidies should be allowed in federal exchanges.
The House investigation also determined that, while the IRS was considering the rule, the ONLY written analysis on the matter was a memo issued by the IRS’ Office of Chief Counsel. The brief, ONE paragraph statement contained a SINGLE explanation for the IRS’ decision to allow subsidies in the Federal exchanges.
In a stunning a lack of oversight, the senior IRS and Treasury officials who were charged with interpreting the law didn’t think that the limits placed on the tax credits and subsidies would be a significant issue.
Without these subsidies and tax credits to help offset expenses, millions of Americans will see their healthcare premium costs skyrocket. If the Affordable Care act can’t remain “Affordable”, the entire plan will collapse.
Meanwhile, if the Administration’s reckless interpretation of the law is allowed to stand “as-is”, the consequences are equally disturbing.
While the tax credits and subsidies would remain available to Americans on both the State and Federal exchanges, the increase to the overall cost of PPACA is startling.
According to the joint Committees report, extending the tax credits and subsidies to the 34 states that are on the Federal exchange will result in an ADDITIONAL $500 Billion in Obamacare spending over the next decade.
Allowing the IRS rule to stand will also expand the employer mandate in those 34 states, exposing employers to potentially tens of billions of dollars in IRS penalties. Millions of employers will have little recourse in avoiding the penalties and have to limit their workforce to only part-time employees.
The debate over the IRS rule is one of the hottest challenges to Obamacare to date. Ultimately, the question will be determined by the US Supreme Court and the verdict could go either way.
One thing is certain, however… regardless of how the Obamacare law is interpreted, the outcome will not be “Affordable.”