WASHINGTON, DC - A recent memo prepared by the nonpartisan Congressional Research Service (CRS) in mid March raises questions about the legality of the administration’s Feb. 27, 2014, decision to allow states to offer subsidies to individuals enrolling in health care coverage outside of the exchanges. House Energy and Commerce Committee staff requested CRS examine the administration’s decision regarding the advance premium tax credits. The administration’s announcement is just one of dozens of unilateral changes to the president’s signature health care law.
CRS finds, “A literal application of the language in § 36B of the IRC and § 1412 of the ACA would initially seem to be incompatible with the provision of APTCs to issuers for coverage that was not provided ‘through’ an Exchange. The refundable credit under § 36B is calculated based on ‘coverage months’ which are defined as months during which the taxpayer was enrolled in coverage ‘through an Exchange.’ Applied literally, this provision would exclude months in which the taxpayer was enrolled in coverage not obtained through an Exchange. Since the APTC is premised on a taxpayer’s eligibility for a credit under § 36B, the issuer of the plan in which the taxpayer was enrolled would not appear to be eligible for an ATPC with respect to that coverage under § 1412 of the ACA."
Energy and Commerce Committee Chairman Fred Upton (R-MI) commented, “As this memo and other analyses make clear, the administration’s unilateral changes to the health care law are often based on questionable legal grounds. What’s worse is the administration’s actions often put taxpayers at even greater risk. It’s well past time for fairness for all."
Read the complete CRS memo online here.
