Where does the Administration Get the Authority To Give Subsidies To People Who Buy Health Insurance Outside the Exchanges?

March 1st, 2014

When the New York Times questions the President’s authority, you know he’s in trouble.

The Obama administration said Friday that it would allow some people to receive federal subsidies for health insurancepurchased in the private market outside of health insurance exchanges. The sudden shift was the latest in a series of policy changes, extensions and clarifications by federal officials trying to help beneficiaries and minimize political damage to Democrats in this election year.

Federal officials said they had agreed to provide such assistance retroactively because technical problems had prevented consumers from using online exchanges to obtain insurance and financial aid in some states.

Gov. John Kitzhaber of Oregon, a Democrat, had specifically asked the federal government to allow financial assistance, in the form of tax credits, for people buying insurance outside the state’s troubled exchange. Other states running their own exchanges, including Hawaii, Maryland, Massachusetts and Minnesota, have also experienced technical difficulties, creating political problems for their governors.

The Obama administration’s decision came as a surprise because the Affordable Care Act is clear: Federal subsidies are available only to people who enroll in a “qualified health plan” through an exchange.

The Administration can’t unilaterally decide to give money to people out of the blue. There is absolutely no statutory authority for this. I’ll spare you the rant, as I’ve done it many times before. This lawlessness is appalling. 

Update: Here is the legal “authority” for this change.