I can save the Affordable Care Act for just $360.00!!
2019 OPEN ENROLLMENT ENDS (most states)
Time: D H M S
I wrote a week or so ago about the Halbig v. Burwell (formerly Halbig v. Sebelius) case currently pending in the D.C. Circuit Court of Appeals. The short version is that there's a challenge to the IRS doling out tax credits to the 5 million people or so who enrolled in and qualified via Healthcare.gov (the Federal exchange) across 36 states, based on the wording of one particular section of the Affordable Care Act which supposedly refers to subsidies only being allowed for the exchanges run by the state.
At issue is Section 1401, which states:
The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of—
(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer's spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or...
So, any healthcare exchange "established by" the Federal government is (according to the plaintiffs of this case) not allowed to give out subsidies; only exchanges "established by" individual states can do so.
If it makes it all the way through the court system, there's the potential for absolute chaos; not just politically, but economically, legally, etc, especially since at least 5 million people (and potentially up to 10 million or more, assuming it doesn't make it through to the SCOTUS until, say, next spring) will have presumably already received tax subsidies.
Of course, even if the SCOTUS does rule for the plaintiffs in the end, it's very likely that they'll include a note that basically tells Congress "You know, there's an easy way to fix this; just go over section 1401 with a dab of liquid paper and revise the sentence to read "...enrolled in through an Exchange established by the State or the Federal Government" or whatever.
That would be a completely reasonable solution...if there was a snowball's chance in Hell that Congress would do so. Obviously the GOP would never let it go through (assuming that they hold the House and/or take over the Senate), so the clusterf*ck would ensue.
However, depending on what "established by" and "facilitates" are defined as (see section 1311 as referred to in the passage above), it seems to me that there's a different, equally simple (if utterly stupid) possible resolution which would cost no more than $358.20!
Here's my point: Even the state-run exchanges such as CoveredCA, NYStateofHealth and so aren't run entirely on state resources. I don't know all the technical details, but I'm assuming that they have to hook into the IRS database (to prove federal income tax status), the INS database (to prove citizenship) and other federally-run systems, right? Yes, perhaps 90% of the back end of the start-to-finish "exchange" is handled at the state level, but there's some amount of federal involvement (beyond the actual startup funding, of course) for all of the exchanges.
So, the question becomes, just how much of the "establishment" has to be done by the state, and how much is allowed for by the Feds? For that matter, if "the state" contracts out the actual site development work to a private corporation, that's technically not being done by "the state" or "the Feds"...it's being done by a private company which is simply paid for their services by one or the other (ie, the Oracle debacle in Oregon; CGI Federal at the Federal level; Deloitte or Accenture in other states, etc).
In other words, what do "established by" and "facilitates participation" actually mean?
Depending on the answer to those and related questions, there could be an incredibly stupid-sounding solution.
I'm referring to domain names.
Yes, that's right: For just $9.95 apiece (or less, if you shop around), the United States Federal Government could simply ask the health departments of the 36 states in question to snap up a domain name along the lines of:
...and so forth.
Then, just set up those domain names to repoint to the appropriate sub-section of Healthcare.gov (healthcare.gov/alabama, healthcare.gov/alaska, etc.) Heck, Illinois is already set up this way.
Does that count as "establishing" an exchange? What about if the state threw in a little splashpage before you get redirected to HC.gov?
And no, I'm not being snarky. I'm dead serious...depending on the reasoning of the judges in question.
Now, the "domain solution" I describe above would still have one more hurdle, of course: You'd still have to get the individual states to agree to pony up $9.95 per year and set up a simple domain redirect. Illinois has already done so; presumably other blue-leaning states would follow. That would leave about 30 states, give or take, including Texas, Florida and so forth.
However, can you imagine the public outcry from residents of those states when they find out that they have to return thousands of dollars to the IRS because their own state government isn't willing to pay the price of a Denny's Grand Slam breakfast (with generous tip) to keep things in place? Somehow I don't think even ACA-hating residents of Oklahoma or Tennessee would stand for it.
Yes, I realize how insanely naive this sounds...but weirder things have happened, and most of them seem to have involved the ACA anyway.
UPDATE: From my comment below, a real-life example which actually sparked this post:
The words "establish" and "facilitate" can be very slippery. When a movie wins Best Picture, the Oscar goes to whoever happens to be legally listed as the Producer of the film, not the director (unless it's the same person), even if the "Producer" didn't actually do a damned thing.
I have a client who had me develop a whole new version of their website, along with the hosting. However, the domain name is still legally registered to their former business partner, preventing the new site from going online. The client is trying to sort it out now to acquire control over the domain, but this raises the question: Who "established" the old website? Who "established" the new one? Who is "facilitating" either one?
Is it the former business partner? They registered the domain name and set up the old hosting which is necessary to "facilitate" visiting the site.
Is it the current owner/client? They hired me to develop the new site and hosting.
Is it ME? I'm the one doing the actual work and setting up the new hosting account, therefore "facilitating" the ability of people to visit the site...including the client.
A tiny example, but you get my point.
UPDATE x2: Jamey Harvey, an IT team lead who (I just learned, even though he's been following me on Twitter for awhile!) apparently heads up the DC exchange, just informed me (I'm splicing together two tweets, so forgive the abrupt wording):
To answer your question, state exchange rely on "federal hub" as the first source of data for applicants' APTC eligibility; the SBE sends unique identifier for the person, right upfront, and the IRS sends back estimated APTC based on previous year