WH Scrambles to Sneak Fix for 'Major Glitch' in Obamacare

Wednesday, 16 Nov 2011 12:50 PM

By Andra Varin

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A “major glitch” in President Barack Obama’s signature healthcare legislation could derail Obamacare, and the administration is trying desperately to sneak a fix into the package without going through Congress, according to an opinion piece in The Wall Street Journal.

The problem surrounds “premium assistance,” which gives tax credits and subsidies to households that buy insurance through new health insurances exchanges, Jonathan H. Adler and Michael F. Cannon write in the Op-Ed.

“This assistance was designed to hide a portion of the law's cost to individuals by reducing the premium hikes that individuals will face after Obamacare goes into effect in 2014,” Adler and Cannon write.

The law encourages states to form these health insurance exchanges but says the federal government can institute them if the states don’t. The premium assistance is authorized only for state-run exchanges, not federal ones.

“In other words, states that refuse to create an exchange can block much of Obamacare's spending and practically force Congress to reopen the law for revision,” the authors write.

In an attempt to “avoid that legislative debacle,” the administration has proposed an Internal Revenue Service rule that would allow premium assistance for both state and federally funded insurance exchanges.

That won’t fly, Adler and Cannon contend, arguing: “The text of the law is perfectly clear. And without congressional authorization, the IRS lacks the power to dispense tax credits or spend money.”

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