A Supreme Court ruling expected this summer will determine whether the federal government can subsidize the insurance costs of individuals in states that did not establish their own health care exchanges under the Affordable Care Act.
Douglas Elmendorf was the director of the Congressional Budget Office when Congress debated the bill, and on Tuesday he provided some ammunition to backers of the law who insist that that Congress did not intend to prevent payments of subsidies to consumers in states using the federal exchange.
In an interview with CNBC’s John Harwood at the Peter G. Peterson Foundation’s 2015 Fiscal Summit*, Elmendorf said that before the ACA passed, the CBO analyzed the bill for members of Congress, many of whom were powerfully opposed to it. At the time, he said, there was a common understanding on Capitol Hill that the subsidies would be available to states regardless of the status of their exchanges.
“That analysis was subject to a lot of very intense scrutiny and a lot of questions,” he said. “My colleagues and I can remember no occasion on which anybody asked why we were expecting subsidies to be paid in all states regardless of whether they established exchanges or not. And if people had not had this common understanding…then I’m sure we would have had a lot of questions about that.”
Pressed by Harwood, Elmendorf added, “My colleagues and I talked to a lot of people, with a lot of questions about nearly every aspect of the analysis that we did…and we could not remember anybody asking us any questions about what would happen in the federal exchange different from what would happen in the state exchanges.”
Even so, the language of the law states that the subsidies would apply to exchanges “established by the State” and the Supreme Court will decide how literally those words must be interpreted.
*Pete Peterson also funds The Fiscal Times.
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