The Fine Print of Obamacare

The tortuous way the Affordable Care Act wound its way through Congress is reflected in every aspect of the final version of the law. The ACA calls its individual mandate to carry health insurance a “fine” rather than an IRS-administered tax, which the Supreme Court later had to clarify when the Court upheld the law’s individual mandate in 2012, ruling that it was a tax. The ACA was also passed without a severability clause. A severability provision is a sentence Congress routinely adds to important legislation expressing its view about whether, if a court holds an individual portion of a law invalid or unenforceable, remaining portions of that law should in Congress’ view remain on the books. When the Supreme Court was reviewing the constitutionality of the ACA’s individual mandate, advocates for health insurance reform were rightfully concerned that the entire law could be struck down because Congress passed the final version of the ACA, without a one-sentence statement that could have been boiler plated at the bottom of each title in the bill.

Either Justice Scalia or Justice Roberts noted, during the ACA oral arguments in March 2012, that the Supreme Court had previously invalidated entire laws that did contain severability clauses, even if only a single aspect of a law was problematic to the Supreme Court. Even so, it would have been slightly less nerve wracking for the ACA’s advocates if the final version of the ACA had included a severability clause. The snapshot shows one of two severability clauses in the House-passed version of the ACA. When the Supreme Court did rule that a key Medicaid-related portion of ACA was unconstitutional, the Court reached deep into part of the Social Security Act and pointed to a severability clause there, as justification for leaving the rest of the ACA on the books.

Cost Subsidy Payments Under Fire

Premium tax credits that make ACA insurance plans affordable for lower and middle income Americans are, according to Avik Roy and Michael Cannon, apparently only valid in states that establish their own insurance marketplaces. Now, cost sharing subsidy payments to ACA health plans that make those plans’ co-pays and deductibles affordable for lower-income people are under fire from House Republicans, on the grounds that the ACA didn’t make a permanent appropriation allowing the government to make the cost sharing subsidy payments to plans. The House-passed version of the ACA created a “Health Choices Commission” with a corresponding federal trust fund, from which both premium and cost sharing subsidies would have been paid. But that version of the ACA had to be scrapped, and the version we have may require a temporary appropriation from Congress to operate key aspects of the law’s programs.

Why the ACA Needs Congress

The final version of the ACA gave the litigious opponents of health insurance reform plenty to work with. Many key aspects of the ACA are subject to temporary (or continuing) appropriations from Congress. This stands in contrast to other federal programs like Medicare and Medicaid. Congress made complete, permanent appropriations to fund Medicare and certain aspects of Medicaid. Except for the low-income residents of D.C., even Medicaid can’t be immediately impacted by lapses in Congress’ temporary appropriations.
Not so for the ACA. No money was appropriated (permanently or otherwise) to build the federal health insurance marketplace, HealthCare.gov. There were no permanent appropriations to fund state or federal consumer assistance programs that are essential to the ACA’s success. Many of those programs languished when the first round of temporary appropriations for consumer assistance weren’t renewed, as the control of the House changed hands in 2011. A key component of the ACA’s insurance premium stabilization programs – a component that was modeled on the Medicare Part D program – has similarly come under fire for not being authorized by a valid appropriation. Medicare Part D itself has been operating the premium stabilization program in question, which is known as the risk corridors program, in the absence of a specific Congressional appropriation since 2006.

A Legislative Mess

Drafting inconsistencies abound in the final version of the ACA legislation because the ACA never really went to conference. Conference committee is the phase of the legislative process where the two Houses of Congress reconcile differences between their respective versions of a bill. Instead of going to conference, the differences between the House-passed and Senate-passed versions of the health care law were hashed out between Democrats in the House and Democrats in the Senate, privately, during an ad hoc conference committee over the 2009 to 2010 Christmas recess. That conference report was never made public, and it never came to the floor of either chamber of Congress for a vote.

The secret conference report quickly became irrelevant when Republican Scott Brown beat Martha Coakley (D) in a Massachusetts special election on January 18, 2010. Brown took away the Democrats’ filibuster-proof supermajority in the Senate, and his election temporarily eviscerated lawmakers’ confidence in their ability to pass any sort of health care bill. All hopes that the apparently well ironed-out ACA conference report could receive a vote were dashed, for procedural reasons, when Scott Brown was elected. The ACA immediately lost all the political staying power it had slowly garnered through the fall of the previous year, which built up more and more until the full Senate held its vote approving the ACA early in the morning, during a snowstorm, on Christmas Eve. When Scott Brown won, a Massachusetts newspaper characterized Democrats as little people running around Washington, acting like chickens whose heads had just been cut off. They didn’t know what – if anything – they could do to pass a health care bill.

ACA Opponents See Opportunities

A few things happened to revive the ACA’s chances of being approved by Congress – in at least some way, shape or form. Key events reviving the ACA took place between January 18 and March 21, 2010, when the House passed the Senate version of the ACA and moved the bill to the President’s desk. Perhaps an insurance company wanted to revive the Democrats’ chances of passing a bill, because Anthem BlueShield of California announced massive premium increases in that state’s individual health insurance market in early February. The Obama Administration railed against Anthem for the proposed increases, which California had no power to stop under the law as it existed them (or now, for that matter). The Administration’s response to the Anthem increases epitomized the rallying cry the political left had successfully used for over a year, to get its base to support health insurance reform.

Then, in February 2010, the White House held a meeting with Republican and Democrat leaders of the House and Senate – with President Obama giving his A-game performance on the national television. This meeting also helped improve chances of passing a health care bill. Finally, then-Speaker Nancy Pelosi worked with the then-heads of the three House committees with jurisdiction over health insurance reform – the Committees on Energy and Commerce, Ways and Means, and Education and Labor. The Speaker and her allies worked hard to steel their ACA troops in the House to pass the bills needed to reform the health insurance system. The House and Senate finally passed the ACA in a two-step process, taking advantage of budget reconciliation to amend an already-passed Senate version of the ACA. The Senate version was itself the product of a messy merger of two Senate-side committees’ health insurance reform bills.

The ACA was signed into law in March 2010. Shortly afterward, opponents began finding sections of the law that didn’t quite add up in the way that a seamlessly crafted piece of legislation might have. The ACA didn’t benefit from a Congressional conference committee. It also may not have had the same regular support or interaction with the Legislative Counsel during each painful, ad hoc step the ACA’s supporters took to get the bill signed into law. The ACA passed after mergers and amendments to different Congressional committees’ bills, and the final version of the bill was further amended by changes lopped onto the Senate’s final product by the House of Representatives. There will be more errors and inconsistencies for opponents to find and exploit. The law and its implementing regulations give the ACA’s opponents potentially unlimited opportunities to find, manipulate, and sue over the legislative language the ACA’s opponents gave Congress no choice but to enact.

Note: only my own views here.

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Supplemental Reading

Vox’s Sarah Kliff: Meet Michael Cannon, the man who could bring down Obamacare

MSNBC: House Republicans File Long-Threatened Lawsuit Over Affordable Care Act

Josh Schultz works at the Medicare Rights Center in New York City. He helps elderly, disabled, and low-income people navigate the complex and fragmented health insurance system and enroll in and use their health care coverage under Medicare, Medicaid, and the Affordable Care Act. Josh’s undergraduate Political Science thesis was titled, “Health Reform After Scott Brown: Speaker Nancy Pelosi’s Sixty-One Days.”