One of our favorite (and very brainy) bloggers, Dr. Jaan Sidorov, hosts this week’s brainy Health Wonk Review – don’t miss it. My favorite entry in this HWR is actually a two-part debate at Health Affairs regarding semantics in the PPACA. This is an issue that I wasn’t previously aware of, but I imagine that it might become the next big deal in the process of healthcare reform and PPACA implementation. Here’s the essence of it:
In the PPACA, the official language dealing with tax credits in the exchanges notes that the tax credits are available to people enrolled in a health plan through “… an Exchange established by the state under Secion 1311.” The key phrase here is “established by the state” and it’s sure to be a source of contention because quite a few states are opting to not create their own exchanges. That means that in those states, the default arrangement will be federally-created exchanges. And whether or not people in those states will be eligible for tax credits now appears to be the subject of some debate.
On one side, we have Timothy Jost, a law professor at Washington & Lee University. He argues that Congress meant to offer tax credits for people in both federally- and state-run exchanges, and that the technicality of the language (which only mentions state-run exchanges) is superseded by the intent of the law, which is to expand access to health insurance for everyone, regardless of what the individual states opt to do.
On the other side, we have Michael Cannon of the libertarian Cato Institute and Professor Jonathan Adler of Case Western University, claiming that the language of the law should be (and was intended to be) read exactly as it’s written: that only people in state-run exchanges will be eligible for tax credits to help offset the cost of health insurance. The idea here is that Congress wanted to encourage states to set up their own health benefits exchanges, and the tax credit language was designed to be an incentive to do so (ie, we’ll do this for you if you won’t do it on your own, but your residents are going to miss out on some valuable tax credits that way).
Both arguments are interesting, and very convincing. I read Jost’s first, and found myself nodding in agreement all the way through. But then when I read Cannon and Adler’s response, I also found their points to be compelling and hard to refute. This could be the sort of issue that many people would see as splitting hairs, but on an issue as contentious as the PPACA, I can see this debate getting quite a bit of traction over the next year as the exchange implementation process churns along. And it makes me glad that Colorado took the initiative early on (despite a lot of political wrangling) to begin the process of creating our own exchange. I know there are many flaws in the PPACA, and that the yet-unanswered question about how the exchanges will be funded starting in 2015 is a valid concern. But it still seems like a better solution than sitting back and waiting for the federal government to set up an exchange for us that 1) would not be tailored to our state’s specific needs and 2) might make Colorado residents ineligible for much-needed tax credits to help pay for health insurance.