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Editor: Katharine Van Tassel
Akron Univ. School of Law

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Tuesday, August 7, 2012

Tax Credits, Federal Exchanges, and Misplaced Blame

It appears that congressional opponents of the Affordable Care Act will stop at nothing to derail it, even if it means that their own constituents would suffer.  Recently, House Republicans on the Oversight and Government Reform Committee questioned the Internal Revenue Service's ability to apply tax credits to the purchase of health insurance in federal insurance exchanges that will be set up by the federal government in states that refuse to set up their own insurance exchanges.  These tax credits are designed to make private insurance affordable for moderate-income consumers who want or need to purchase insurance on these exchanges.  So if the the law is not interpreted to allow the IRS to apply the tax credits in states that refuse to set up health insurance exchanges, consumers in those states will be forced to either purchase insurance they cannot afford, or pay the tax due for failure to purchase health insurance.  Even though the non-partisan Congressional Budget Office and the congressional Joint Committee on Taxation agree with the IRS, these sage representatives apparently know better.

 I assume that the overall strategy here is to ensure that people in these states get so upset by the unaffordability of insurance on the exchanges (due to the lack of tax credits available to them) that they blame the supporters of the law for this debacle, rather than the politicians who are apparently willing to sacrifice their own constituents' well-being and pocketbooks in favor of their agenda.  This reminds me of the ACA Supreme Court dissenters' concerns that the Medicaid expansion in the ACA could confuse voters by blurring the lines of political accountability between the federal government and the states.  The argument is that voters who are upset by the expansion of Medicaid and the bureaucracy needed to achieve the expansion would blame the states, rather than the federal government, for the expansion, and that this poses a danger to our federalist system.  Apparently, the opponents of the ACA do not share this concern of misplaced blame when it comes to playing politics in Congress.

I quote the late Telly Savalas as Kojak: "Who (really) loves ya, baby?

 [VJW]

Cross-Posted on Healthy Interests

http://lawprofessors.typepad.com/healthlawprof_blog/2012/08/tax-credits-federal-exchanges-and-misplaced-blame.html

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