By Tom Howell Jr.

The House’s Republican investigators on Wednesday accused the Obama administration of “re-writing the law” for political reasons when it extended government subsidies tied to the president’s new health care law to state-based insurance markets run by the federal government this fall.

Rep. James Lankford, Oklahoma Republican and chairman of a health subcommittee of the Committee on Oversight and Government Reform, said the Affordable Care Act clearly states the funds are solely intended for exchanges set up by the states.

The Treasury says it interpreted the law in a way that is consistent with its overall purpose, while opponents say the administration’s decision will add “hundreds of billions” in spending dollars that were not authorized by Congress, Mr. Lankford said.

The debate looms as one of the biggest legal challenges to the rollout of the Obama health law’s exchanges, targeting a centerpiece of the plan to extend health insurance coverage to tens of millions of Americans.

Oversight Chairman Rep. Darrell Issa, California Republican, and other critics of “Obamacare” for months have argued the administration did not count on more than half of the states defaulting to a federally-run exchange, where those without employer-based insurance can buy private coverage through the help of tax credits paid in advance.

“When Congress passed the health care act, they provided states a choice,” Oklahoma Attorney General E. Scott Pruitt, who has sued the administration over the issue, testified before the subcommittee.

The exchanges will start to enroll Americans on Oct. 1 for health coverage that takes effect in January.

Emily S. McMahon, deputy assistant Treasury secretary for tax policy, is scheduled Wednesday to explain the administration’s position to the House panel.

Simon Lazarus, senior counsel at the Constitutional Accountability Center, testified the administration’s interpretation of the law “is correct, that reviewing courts must defer to it, and that they should not and will not overturn it.”

Opponents of the law say the administration has exposed certain employers to the law’s “employer mandate.”

The mandate, which the Obama administration recently delayed by one year, to 2015, requires employers with 50 or more full-time workers to provide health coverage or pay fines. The fines kick in when at least one employee takes advantage of the subsidies.