Dealing With Drafting Errors in the Health Care Law

Phillip Swagel is a professor at the School of Public Policy at the University of Maryland and was assistant secretary for economic policy at the Treasury Department from 2006 to 2009.

In legislation as mammoth as the two bills that together constitute Obamacare, it is not surprising to find drafting errors in which the text of the law signed by President Obama does not accomplish the intent of Congress. The desirable response to such errors is for new legislation to be enacted to correct the mistake. With the Affordable Care Act at the center of the current legislative stalemate, however, the possibility for such changes seems remote.  Indeed, it is difficult to imagine opening up the law to just minor changes at any point â€" political forces might well lead members of Congress to seek large-scale changes, whether to gut the law or to expand it to cover some of the 30 million people projected by the Congressional Budget Office to be uninsured in 2016 even after the law has been in effect for several years.

With political reality affecting even narrow legislative fixes favored by both parties, it is fascinating to consider the different treatment by the Obama administration of two salient drafting errors in the president’s signature legislative accomplishment. One error in the legislation, discussed recently in Economix, would make Congressional staff members pay thousands of dollars more for their health insurance than was intended. This situation was addressed by the Office of Personnel Management through a rule change of dubious legality reportedly made under pressure from the White House, which in turn was responding to pressure from both sides of the Congressional aisle.

A second error in the health care law, involving the calculation of the level of insurance costs that are affordable, is projected to leave millions of people with low to moderate incomes unable to qualify for government subsidies to purchase health insurance. As a result, many people who were clearly meant to be covered will remain uninsured. In this second instance involving people with less power and lower incomes than those on Capitol Hill, the Obama administration is implementing the law as written, even though this surely does not reflect the administration’s policy preference or Congressional intent.

As explained by the Congressional Research Service, there are special procedures in the House and Senate for dealing with changes that are technical in nature when a bill has been “enrolled” after positive votes in the House and Senate but not yet signed into law. Once the president has used his pen to turn a bill into law, however, new legislation is required to fix mistakes.

Legislation to make “technical corrections” has become relatively infrequent as Congressional partisanship has mounted over the decades, but it is still done to fix minor legislative glitches (the word “glitch” is a familiar presence in anything written about Obamacare these days). Public Law 110-244, for example, was enacted on June 6, 2008, to make technical corrections to a 2005 transportation funding bill. In addition to providing money for the “bridge to nowhere,” the original legislation included earmarks for projects that by 2008 no longer existed. Among other things, the corrections bill redirected those funds.

Such an approach of a technical corrections bill seems natural to fix the drafting error affecting the Congressional staff. As discussed in detail by the health policy expert Doug Badger, the language of the health care law requires Congressional employees to obtain health insurance through an exchange created by the law, but other parts of the federal legal code restrict the ability of the federal government to pay the usual employer share for group insurance programs approved by the Office of Personnel Management. The complication is that the policies in the new exchanges are individual plans, not group, and they are not approved by the personnel office.

A straightforward reading of the law thus means that Congressional staff members, starting in January 2014, will have to obtain insurance through the Affordable Care Act but pay for it on their own without the normal contribution from their employer â€" Congress.  This would be a multi-thousand-dollar income hit for those affected. Some could presumably switch to coverage offered by their spouse’s employer, but many others would potentially feel the pain, giving rise to concerns over a potential brain drain of Congressional staff members finding other employment.

This was clearly a drafting error and not what Congress intended. A recent Politico article reported that the federal personnel office initially ruled that Congressional staff members would not be eligible for the subsidies, and then changed this decision under pressure from the White House (and thus indirectly from Congress).

A second drafting error in the Affordable Care Act will limit the eligibility of millions of moderate-income families to receive subsidies to help pay for insurance policies in the new exchanges (once the glitches are worked out).  As explained in The Times, the health care law provides subsidies for people with low and middle incomes to obtain insurance through a government-run exchange.  To preserve the employer-based insurance system, however, these subsidies are available only for people who cannot obtain affordable coverage from their employer.

The glitch arises because affordable insurance is based on the cost of individual coverage offered by an employer, which is considerably less expensive than family coverage. Families with moderate incomes could then face a situation in which they can afford individual insurance for the employee and thus do not qualify for subsidies, but cannot afford family coverage.  Indeed, research by Richard Burkhauser, Sean Lyons, and Kosali Simon of Cornell University and Indiana University found that nearly four million dependents would be ineligible for subsidies as a result of the legislative problem.

A natural solution analyzed by researchers at the University of California, Berkeley, would be to split the determination of eligibility for insurance subsidies so that family members could receive subsidies to purchase coverage in the exchanges in the instances in which the worker obtained affordable individual coverage through an employer. The administration determined, however, that this approach was outside the boundaries of the legislative text â€" a decision described by The Times’s health reporter as a “cramped reading of the law” but by others as simply following it. As noted by The Times’s editorial board, this outcome “undercuts the basic goal of health care reform â€" to expand the number f insured people and make their coverage affordable.”

The unfairness of the situations discussed above is twofold. The first inequity is that the drafting errors in the legislation defeat the evident intent of Congress. People are harmed by the errors â€" potentially millions of spouses and children will not have health insurance when they were meant to.

The second dimension of unfairness relates to the exceptional treatment of Congressional staff members. With the affordability issue, the administration appears to have faithfully executed the law, just as President Obama swore in his inaugural oath. Congressional staff members of both parties are dedicated public servants who deserve proper compensation, including the employer contribution to health insurance that is normal in the American system. But it is deeply unfair that this is being accomplished by an administrative decision that sets aside the law, even if done with the connivance of Congress.

It should be possible for the larger (and incredibly heated) debate over the merits of Obamacare to proceed even while specific flaws in the legislation are addressed to avoid unintended harms to thousands of Congressional employees or millions of vulnerable families. I write that without making a judgment about the larger questions surrounding the Affordable Care Act. Indeed, I support the idea of expanding insurance coverage but believe the approach taken by the Obama administration is deeply flawed (a subject for a future column). And yet, in today’s political climate, addressing these unintended harms is not possible, with fault to be assigned at both ends of Pennsylvania Avenue.