Administration Did Not Adequately Review Health Law Before Expanding ObamaCare Subsidies, Report Finds

Published: Feb 5, 2014

WASHINGTON – Today, House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., and the House Ways and Means Committee Chairman Dave Camp, R-Mich., released a joint report that finds the Obama Administration did not conduct an adequate review of key issues prior to expanding health insurance subsidies created by the Affordable Care Act.

In May 2012, IRS and Treasury issued a final rule, which according to many legal experts has added hundreds of billions of dollars in new, unauthorized spending. The rule made premium subsidies available for individuals purchasing insurance on federal exchanges, despite clear language in the Affordable Care Act that explicitly limits these subsidies to individuals in an “Exchange established by a State.”  It also expands the employer mandate tax to states with a federal exchange.

“The evidence gathered by the Committees 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,” the report states. “IRS and Treasury merely asserted that they possessed such authority without providing the Committees with evidence to indicate that they came to their conclusion through reasoned decision-making.”

Key Findings:

–          IRS and Treasury officials expressed concern that there was no authority to interpret federal exchanges as an “Exchange established by the State,” as was necessary to expand the subsidies.

–          The only written explanation by the IRS and Treasury before publishing the rule was a single paragraph with a single reason. The single reason was the entire basis for the IRS’ decision to expand subsides prior to the proposed rule.

–          IRS and Treasury have not provided evidence that they seriously considered the letters and comments made by at least 35 members of Congress who commented on the rule. Officials also did not consider the possibility that the tax credits were intentionally targeted to encourage states to establish their own exchanges.

You can read the full report here.