The ObamaCare Implementation Gauntlet


The political challenges to ObamaCare are obvious, and substantial: A majority of the public is opposed to the law (according to the AP, support for the law just hit a record low). There's a non-trivial chance that the Supreme Court will invalidate some or perhaps even all of the law next summer. Conservative states have delayed or flatly refused to begin work on state-based parts of the law.

But the sheer implementation challenge of designing and managing its many moving parts, both administrative and technical, is also considerable, as this Kaiser Health News/Washington Post joint report points out today:

Those designing a federal exchange face enormous technical, political and financial challenges.

Technically, data from a host of federal agencies need to be collected into one system, which then must be linked with computer systems in 50 states and the District of Columbia.

Matt Salo, executive director of the National Association of State Medicaid Directors, said computer systems in some states are old and may need substantial upgrading. There is some doubt, he said, about whether there is enough "physical capacity in the IT systems world" to get it all done in time.

"Our members have been having conversations with the vendors since the law was passed, and they are coming to the gradual conclusions that no, they don't have the capacity to do this everywhere in the time frame," Salo said.

Political threats also abound. No one knows whether the Supreme Court will invalidate part or all of the law next year; it is not clear how much funding will be available to launch and operate the federal exchange; and the outcome of the presidential and congressional elections could delay or derail the entire process.

Setting up the federal exchanges in those states that decline to set up their own should be a giant headache: As I noted in September, the text of the legislation makes quite clear that there is no money available to fund the law's middle-class insurance subsidies, which would mean that individuals earning between 133 and 400 percent of the poverty line who also live in states with federally run exchanges would not only be forced to purchase health insurance, they'd be forced to purchase health insurance without the help of the law's health insurance tax credits. 

But the administration is essentially ignoring the text of the law, as Michael Cannon and Jonathan Adler explained in The Wall Street Journal last month:

The Obama administration wants to avoid that legislative debacle, so this summer it proposed an IRS rule to offer premium assistance in all exchanges "whether established under section 1311 or 1321." …According to a Treasury Department spokeswoman, the administration is "confident" that offering premium assistance where Congress has not authorized it "is consistent with the intent of the law and our ability to interpret and implement it."

Such confidence is misplaced. The text of the law is perfectly clear. And without congressional authorization, the IRS lacks the power to dispense tax credits or spend money.

What about congressional intent? Law professor Timothy Jost suggests that since ObamaCare requires all exchanges to report information about premium assistance, and it would be silly to impose that requirement on federal exchanges if their enrollees were not eligible, that shows Congress could not have intended anything but to provide assistance in federal exchanges. At least, he argues, there's enough ambiguity here about Congress's intent that federal courts will permit the administration to resolve it.

Not so fast. The Supreme Court has increasingly limited such deference to cases where the text of the law—rather than Congress's intent—is ambiguous. In this case the language of the law is clear, as even Mr. Jost admits.

The health law's authors in Congress deliberately chose to pass the bill with known imperfections and to use the reconciliation process to make only limited amendments. Writing a perfect bill would have required too many votes and risked failure. If what they passed was an imperfect bill with no premium assistance in federal exchanges, then that is what Congress intended.

Now, you can understand why the administration has chosen to turn a blind eye on the legislative text in this instance: The Obama administration seems less than interested in creating any kind of federal exchange; better to get each of the states to buy in by creating their own. And politically, it would be a disaster. Think of how controversial the mandate to purchase health insurance is already. Now imagine a slew of states where millions of individuals were forced to purchase health insurance without assistance, and from an exchange where the feds run the show.