by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
…Until Obamacare begins. October 1, 2013 marks the start of the enrollment period for consumers to purchase health plans via online health insurance exchanges. Individuals making an annual household income between 100-400% of the Federal Poverty Level (FPL) will be eligible to receive premium assistance subsidies in only states that have opted to create their own exchanges. So far, 17 states plan on implementing a state exchange while 34 states have opted for a federal fallback.
Many Obamacare supporters dismiss the fact that Congress originally intended for the limitation of premium assistance subsidies in state-established exchanges. However, congressional intent holds true:
1. Congress cannot force a state to establish its own exchange, since this would be considered “constitutional commandeering.” Rather, restricting the flow of subsidies to state exchanges intentionally acts as a financial incentive for states to comply with Obamacare. States that do not opt for a state exchange forfeit those subsidies.
2. Under the Affordable Care Act, section 1311 refers to state exchanges while section 1321 refers to federal fallback exchanges. Section 1401 presents the premium assistance subsidies that will assist individuals living between 100-400% of the federal poverty level (FPL) to purchase health coverage. Section 1401 is expressly written with reference to section 1311 and section 1311 only.
3. Lastly, and perhaps most importantly, the PPACA would never have been signed into law without major concessions, one being limiting subsidies to state exchanges.
Consider the law’s legislative history. The special election in January 2010 in which Sen. Scott Brown (R) filled the seat of the late Sen. Edward Kennedy (D) — Mass, threw a wrench in the plans for House approval of the final Senate bill. For House and Senate Democrats to avoid a Republican filibuster, final negotiations resorted to a budget reconciliation process. During that process, the House could impose limited amendments to the Senate’s final bill. House Democrats had to tread lightly, for the Senate would ultimately give final approval to such amendments.
To add a little more icing on the cake, even Max Baucus (D) — Mont., the law’s primary architect, affirmed the reallocation of subsidies within state exchanges was conditional.