Bruce Bialosky

Some people want you to suspend your imagination and your memory regarding what the Affordable Care Act (Obamacare) actually states in terms of who can receive subsidies for their health insurance. Of course, as usual, when you have right on your side, truth does not matter. But we will explain why the subsidies disbursed from the federal exchange fails the test of what is right.

As you know by now, there were two rulings issued in a Court of Appeals that were diametrically opposed to each other. The issue revolves around whether the federal exchange (operating in 36 states) which is dispensing subsidies was authorized by the law. In referring to who may issue subsidies, the law says “an Exchange established by the State.” The people in favor of continuing the federal subsidies want us to believe that either that was not what the law really says or was countered by language in other sections of the bill, or that was clearly not the intent of the law.

After spending a couple weeks reading and listening to those who support the federal subsidies, I have not become aware of any substance to these positions. A perfect example is a principal supporter of the law in the press, E.J. Dionne of the Washington Post. He states as a defense “the law was not particularly well drafted.” He then goes on to say “Never mind that many other parts of the law clearly assume that the subsidies apply to people on both the state and federal exchanges.” Mr. Dionne, like everyone else making this argument, fails to cite where in the law this is done. Tell us where and we will believe you, but what the true believers think is that if they repeat that claptrap often enough it will become the truth. Not so. Dionne goes on to say “And never mind that during the very long debate over the ACA, no one ever said otherwise.” Let us understand -- since no one argued a negative that the federal exchange is not able to issue subsidies, it must be able to issue subsidies even if the law clearly says they are allowed from state exchanges.

Jill Horwitz, a UCLA law professor, and Sam Bagenstos, a University of Michigan professor writing in the Los Angeles Times exemplify this position. They said “The D.C. Circuit relied on a superficially plausible but ultimately nonsensical reading of the Affordable Care Act's text.” In essence they are saying don’t believe what the text says; believe what we tell you it means -- as if the ACA is a romance novel riddled with double entendre. They go on to state “There is not one shred of reliable evidence that anyone ... understood the Affordable Care Act to limit subsidies to only participants in state-established exchanges. “ Again those who read the text as it is stated are supposed to prove a negative; i.e., that it was never the intention to limit the subsidies through a federal exchange.

Then there is the issue of the intent of the writers. Liberals are big on intent as opposed to what a bill says. I can’t get away with that. I try it with my wife telling her I intended to take her to Paris for our anniversary. Even though I actually didn’t, I should get credit for it because it was in my heart to do so. Ah, to be a liberal!

Those in favor of federal exchange subsidies want to argue it was the intent (with absolutely no stated support for that argument) by hoping to repeat it often enough so it becomes the truth. But, if anything, the intent (if it even matters) really falls on the other side and we believe it was a moving principle of the wording.

First, it is exactly the structure used for the Medicaid program for the past fifty years and the only model that existed upon which the law could be fashioned.

Second, it was the political reality at the time. In 2006, Rahm Emanuel was responsible for recruiting Democrats to run for Congress. He smartly recruited relatively conservative Democrats in many districts that helped Nancy Pelosi to become Speaker of the House. This greatly expanded the coalition known as Blue Dog Democrats. They stayed in office and actually grew in number in 2008. These were the people who enabled Pelosi and her team to pass Obamacare in the House. While writing the bill in the Senate they had to pay attention to getting the votes of these House members along with conservative Democrats like Senator Ben Nelson of Nebraska.

These members were jittery about the bill. They would never want the health care system totally turned over to the federal government. These people were not like Nancy Pelosi and Henry Waxman who actually believe the federal government works well. They were small-government Democrats. Of course they are now gone from Congress. After being used as cannon fodder by Pelosi, the Blue Dogs have shrunk from 52 members to 19 currently.

Third, people in support of the bill never thought that 36 states would not form their own exchange. In fact they thought the opposite. Comments that were made by MIT Professor of Economics Jonathan Gruber (a paid consultant regarding the drafting of ACA to the tune of $392,600) support this thinking. By now you have likely seen what he stated at the time: “What’s important politically about this is if you’re a state and you don’t set up an exchange, that means your citizens (residents professor, people are residents of a state, citizens of a country) don’t get their tax credits – but your citizens still pay the taxes that support this bill. So you’re essentially saying to your citizens, ‘You’re going to pay all the taxes to help all the other states in the country.’” Gruber now disavows what he said, indicating it was a “speako”. His statement seems crystal clear to me except for the misuse of the word citizen. But that is now inconvenient so he uses liberals’ favorite friend again, Emily Litella (Gilda Radner), as they say “Never Mind.”

Last is the issue of how this rule was promulgated. After the legislation was found wholly inadequate, the IRS -- America’s favorite bureaucracy – determined that it was the right of the federal exchange to hand out subsidies. Forget that this is another blatant political act by the IRS. The defenders of their action hang their hats on a 1984 Fourth Circuit court ruling (Chevron vs. NRDC). It says that where there's an ambiguity that's interpreted by the government agency in charge of Administering that law, the agency must be given deference unless its interpretation is wildly improper. This means -- we don’t understand the plain English of the law or we don’t like the plain English so we can make any interpretation we wish as a bureaucracy to further our existence as long as someone cannot muster millions of dollars to sue us. In effect, if you believe this ruling, every law enacted by Congress is open to whatever the bureaucrats believe it says. If there ever was a need for the Supreme Court to stomp on something here it is.

The legislation clearly states what it states – subsidies come through state exchanges. There is no contrary evidence in the bill and no evidence of intent (as if that matters) that it was otherwise. There is no ambiguity. Now that their ice cream sundae has turned to a puddle of goo they want to change reality to meet their needs. The Supreme Court should straighten them out and fast.

Bruce Bialosky

Bruce Bialosky is the founder of the Republican Jewish Coalition of California and a former Presidential appointee. Follow him on Twitter @brucebialosky or contact him at