Republicans in the U.S. House of Representatives – undaunted despite having come up short for six years with ceaseless efforts to kill or maim the Affordable Care Act – struck again, on Thursday, July 7, and Friday, July 8, with back-to-back hearings in two separate committees. As touted in the headline of their joint press release, the two committees – Ways & Means and Energy & Commerce – sought to “Highlight Obama Admin’s Unprecedented Obstruction to Withhold Facts On Billions In Illegal Obamacare Payments.”

The purported occasion for the redundant hearings was the release of a 158 page “investigative report” amplifying House Republicans’ claim that the Administration has funded the ACA “Cost-Sharing Reduction” program without a “constitutionally required appropriation from Congress.” The cost-sharing reduction (CSR) program currently helps 6.4 million lower income individuals to afford deductibles, co-pays, and co-insurance prerequisites for purchasing health care services and products. Many of these individuals could not afford health care, and therefore might forego buying health insurance without it, antithetical to the outcome the ACA was designed to produce.

The CSR subsidies work in tandem with the ACA tax credit program subsidizing insurance premiums, which the Supreme Court held applicable nationwide one year ago in King v. Burwell, rejecting a high-profile lawsuit by anti-ACA activists. If successful, that lawsuit would have barred the premium assistance tax credits in the 30+ states with exchange marketplaces managed by the federal government, rather than by the state on its own.  

Much like that failed legal challenge, the committees’ attack on the complementary CSR program, itself the subject of an unprecedented lawsuit by the House Republican majority now pending in the D.C. Circuit Court of Appeals, promotes two persistent partisan objectives: to render the ACA dysfunctional, and to reiterate Republicans’ chestnut that President Obama constantly breaches his legal authority, violating his constitutional obligation to “take care that the laws be faithfully executed.”  

The hearings, which vetted no new allegations, received scant coverage outside reliably conservative circles, with one notable exception – a New York Times account of the July 7 Ways & Means session. In this encounter, fractious even by current norms, multiple Republican committee members played tag-team in berating four senior Administration officials, including IRS Commissioner John Koskinen, for allegedly refusing to provide the Administration’s legal justification for determining that payments for the CSR program are lawfully supported by a Congressional appropriation. Surprisingly, the Times account, bearing the over-the-top title, “How an Arcane Spending Fight Could Alter the Federal Balance of Power,” repeated as fact the Republicans’ claim that “Obama administration officials . . . were unable to cite legal authority” for the CSR payments. Equating the Obama administration’s funding of CSR subsidies with hypothetical examples of presidential overreach that amount to “blatantly shredding the Constitution,” the article ignored the witnesses’ disclaimer of competence to represent the administration’s legal position as expressed in its court briefs. More difficult to understand, the article did not mention that one of the witnesses, Treasury Assistant Secretary for Tax Policy Mark Mazur, actually did respond to committee members’ pressure by sketching the extended rationale in “the legal briefs that we refer to,” namely, that the ACA “directs the executive branch to make these Cost Sharing Reduction payments” as an “integrated system” and “part of a piece with the same payments . . . under [the] premium [assistance] tax credit [program].”

Although an outlier in even covering the hearings, this Times account could be taken as an objective picture by those without personal knowledge. So it seems worth noting succinctly that, not only is the Times’ representation of the July 7 hearing, at best, incomplete and skewed; its suggestion that the Administration has no “legal authority” for its position is simply not accurate. As it happens, I appeared the day after the Ways & Means hearing, as the witness recommended by the Democratic minority for the Energy & Commerce hearing on the CSR payments – and as a lawyer who had helped write an amicus curiae brief for the Constitutional Accountability Center, on behalf of leading House Democrats supporting the lawfulness of the administration’s CSR payments. At the July 8 session – contentious but markedly more civil than its predecessor, E&C Oversight Subcommittee Chair Ted Murphy directly asked that I “show this committee where [it is] in the Affordable Care Act that gives that authorization.” My answer was short, as the Administration’s rationale is straightforward and not difficult to explain:

The administration’s interpretation is that within the integrated program that includes both the cost-sharing reductions and the premium assistance tax credits — within this integrated program . . . both portions of the advance payments to insurers are quote, “refunds due from [a section of the Internal Revenue Code specified and amended by the ACA] — because both are compensatory payments to the insurers made available through [that IRC provision], which sets forth the conditions necessary to qualify for both of those subsidies.” That’s the administration’s textual interpretation.

Given the identical goals served by these complementary subsidies and their centrality to the ACA’s legislative plan, the law makes funding available for both subsidies from the same source, 31 U.S.C. §1324, which provides for a permanent appropriation, obviating the need to seek an annual appropriation.

As detailed in DOJ’s brief (and CAC’s supporting brief) at the District Court level, the Administration’s interpretation of the above provisions fits snugly within the approach to interpreting statutes – the ACA in particular – elaborated by the Court’s decision upholding nationwide application of ACA tax credits in King v. Burwell. Writing for a 6-justice majority, Chief Justice Roberts held:

Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is con­sistent with the former, and avoids the latter. [The pertinent IRC section] can fairly be read consistent with what we see as Con­gress’s plan, and that is the reading we adopt.

No one doubts that the premium tax credits and the cost-sharing reductions are integrally related, and that both are critical to what the Supreme Court characterized, in King v. Burwell, as the ACA’s “series of interlocking reforms designed to expand coverage in the individual health insurance market.” The ACA “bars insurers from taking a person’s health into account when deciding whether to sell health insurance or how much to charge”; it “generally requires each person to maintain insurance coverage or make a payment to the [IRS]”; and it “gives tax credits to certain people to make insurance more affordable.” These three reforms, the Court made clear, “are closely intertwined”; the first reform would not work without the second, and the second would not work without the third. King v. Burwell, 135 S. Ct. 2480, 2485, 2487 (2015).

In short, the Administration’s interpretation of the pertinent provisions of the ACA and the IRC fits the ACA’s design and avoids the sort of self-defeating scenario the Court ruled out in King. The Administration has more than ample reason for confidence that its decision to fund the cost-sharing reduction subsidies, essential to enable the ACA to work as intended, will be validated when this latest legal challenge finishes its odyssey through the federal courts.

This piece is cross-posted to ACSblog.