Democrats called a House investigation into the Obama administration’s $7 billion in payments to Obamacare insurers a “waste of time.”
Democrats on the House Energy & Commerce Committee pushed back against a major report that concluded the Obama administration bypassed Congress and provided $7 billion for cost-sharing reduction payments to insurers without an appropriation.
“This is not productive oversight,” said Rep. Diana Degette, D-Colo., during a hearing Friday. “Frankly, it is not even oversight. This is simply a waste of time.”
Democrats said the investigation was inappropriate as the federal court system is already weighing this issue. The House sued the administration last year and a federal judge decided in May the administration did not have authority to provide the cost-sharing payments, a decision President Obama is appealing.
Republicans on the panel said that the report, the result of a joint investigation with the Ways and Means Committee, shows the administration is not following the law.
“The administration decided to raid the permanent appropriation for tax refunds and credits — an action which violated the most fundamental tenet of appropriations law,” said Rep. Tim Murphy, R-Pa., the chairman of the subcommittee holding the hearing.
Other Republicans said that it is still appropriate for the House to investigate the payments despite the pending lawsuit.
“We don’t have to wait until the courts to say what is unconstitutional,” said Rep. H. Morgan Griffith, R-Va.
The cost-sharing reductions are payments given to insurers to lower the co-pays and deductibles for low-income Obamacare enrollees. So far the administration has doled out about $7 billion in payments that have helped 6.4 million low-income enrollees.
When Obamacare was created in 2010, it set up a permanent appropriation for the law’s tax credits given to low-income enrollees. The administration contends that the cost-sharing reductions were included in that permanent appropriation, but Republicans argue the payments aren’t mentioned in the permanent appropriation section of the law.
If the payments are not a permanent appropriation then the administration has to go to Congress every year to get approval for them.
Democrats say that the case boils down to a difference of interpretation over the healthcare law, and that the investigation is overkill.
“With all due respect, what more can we possibly expect to squeeze out of this issue with yet another hearing?” DeGette said. “We know that there is a difference of opinion regarding whether the cost-sharing reduction program requires a permanent or annual appropriation.”
A federal judge sided with House Republicans’ argument that the law never says cost-sharing payments are included in the permanent appropriations. The administration is appealing the ruling.
Another heated point of contention is how the elimination of cost-sharing payments will affect patients. Democrats said that it would have a drastic impact on patients.
“If the trial court opinion is upheld, the result of that will be that the [cost-sharing] fund, which benefits 6.4 million people, will be struck down,” DeGette said.
Republicans responded that the cost-sharing reduction payments are in fact subsidies to insurers and that the law still requires patients to get the reductions to their co-pays and deductibles.
However, independent studies have found that if insurers don’t get the payments they will have to raise premiums for patients to pay for the cost sharing payments.
A study from the left-leaning think tank Urban Institute found if the payments are struck down it will lead to $47 billion more in government spending over the next decade. This is because as premiums rise, tax credits for Obamacare enrollees to pay down those premiums would rise as well.
