The Wall Street Journal printed an opinion piece from a couple of conservative blowhards manufacturing a new controversy against the Affordable Care Act, and naturally, it has gone viral in the conservative world. That's not a surprise. The surprise was seeing Ezra Klein promoting the piece as though it is legitimate. The central claim in the WSJ piece is this: that the language of the ACA only authorizes premium assistance subsidies for exchanges established by states (Sec. 1311), but not to exchanges established by the federal government (sec. 1321) should a state fail to do so. Since only 17 states so far have enacted legislation establishing the exchanges, ObamaCare is going to die a death by 33 states or some such thing. And to make up for that gap, the Obama administration is "rewriting" the law to apply the premium subsidies to both types of exchanges (by the means of an IRS rule).
Only this is not true (see bill text). Neither Sec. 1311 nor Sec. 1321 has an explicit mention of the premium assistance subsidies, which are actually defined in Sections 1401 and 1402. The conservative blowhards are likely referring to this part of 1401 that does refer to Sec. 1311:
‘(2) PREMIUM ASSISTANCE AMOUNT.—The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of—Does this mean only people in state exchanges get the subsidies? It sure seems to say, clear as daylight, "exchange established by the state," doesn't it? This would be true unless the law explicitly and implicitly treats federal government established exchanges in the states exactly the same way it treats state established ones - making them indistinguishable for the purposes of enforcement. It would be true if both intent and language of the law didn't equate the two.
‘‘(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act...
First off, 1311 never once defines exchanges to exclusively mean one established by a state. 1321 itself has the following:
—If—Note the language "such Exchange." That means that exchanges established by the Secretary in the case of failure by a state is, under the ACA, treated exactly the same as one established by a state - that is, it is "such" an exchange. Not just that, the Secretary (of HHS) is given explicit authority and responsibility to not only establish the exchange but also to take actions necessary to implement all the requirements for a state-enacted exchange, which clearly includes premium subsidies by the language of Sec. 1401. The subsidies, in other words, are an inherent characteristic of the exchanges, and the federal government operated exchanges inherit all of the characteristics of a state enacted one, including the premium subsidies.
(A) a State is not an electing State under subsection (b); or
(B) the Secretary determines, on or before January 1, 2013, that an electing State—
(i) will not have any required Exchange operational by January 1, 2014; or
(ii) has not taken the actions the Secretary determines necessary to implement—
(I) the other requirements set forth in the standards under subsection (a); or
(II) the requirements set forth in subtitles A and C and the amendments made by such subtitles;
the Secretary shall (directly or through agreement with a notfor-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.
Throughout the entirety of the final legislative text, "the exchanges" are treated as one and the same, with the same minimum coverage requirements, same reporting requirements, and same requirements on insurance companies participating in them.
I understand why conservative propagandists from the CATO Institute and the Wall Street Journal are interested in spreading this latest lie about health care reform. But why is Ezra Klein? I mean, this is so blatant an attempt at a political potshot that even Republican members of Congress have yet to adopt it. It's just freaking dumb, and that's why only tabloid journalism is paying attention it. Stop taking the CATO Institute's "analysis" seriously, Ezra.