Oversight Committee: Administration Withheld Obamacare Documents

Committee leaders threaten legal action against Treasury Department if they do not turn docs over

Obamacare protesters / AP
August 15, 2013

The House Oversight Committee slammed the Treasury Department on Thursday for withholding documents related to the committee’s investigation of the administration’s expansion of subsidies in the Obamacare exchanges.

Committee chairman Rep. Darrell Issa (R., Calif.) and Health Care Subcommittee chairman James Lankford (R., Okla.) threatened in their letter to use legal force against the department if it does not turn over the documents by Aug. 29.

The committee has been investigating for over a year the administration’s decision to expand subsidies to the federally run health insurance exchanges mandated by Obamacare. The 2010 law creates subsidies for insurance purchased on state-created exchanges, but it is unclear if the law permits the federal government to extend these subsidies to the federally run exchanges.

Issa and Lankford, along with leaders of the House Ways and Means Committee, requested 50 outstanding emails and other documents by Aug. 13 in a letter dated July 25.

The two Oversight Committee leaders found the documents provided by Treasury insufficient.

"In total, Treasury only produced 17 pages of material relevant to the Committees’ oversight," they wrote. "Most of these pages consisted of emails from Treasury staff forwarding or commenting on various news articles or blog posts."

"Treasury’s production does not include a single document or communication created prior to the publication of the proposed rule on [Aug.] 17, 2011," the two chairmen continued.

The committee is again requesting the documents by the end of the month and threatened to subpoena the department if it does not turn the documents over.

"If you do not comply with the Committee’s request by Thursday, August 29, 2013, the Committee will be forced to consider use of compulsory process," they wrote.

A Treasury spokesman did not return a request for comment.

The Oversight Committee held a hearing at the end of July to examine the subsidies. Both legal experts and congressional Republicans argued that the subsidies cannot legally be offered on the federally run exchanges.

Only 16 states and the District of Columbia have elected to set up their own exchanges. The other 34 states either opted for a federal-state partnership or completely ceded authority to the federal government.

A Congressional Research Service report from 2012 said that the language of the law "seems to be straightforward on its face" in limiting the subsidies to only state-run exchanges, although the report did allow for an interpretation that permits the expansion.

Oklahoma is currently suing to stop the federal government from offering the subsidies on the federally run exchanges, a suit that one healthcare expert has said is the most significant current Obamacare litigation.

Oklahoma Attorney General Scott Pruitt argued before the Oversight Committee in July that the law intentionally withheld the subsidies from the states that refused to set up their own exchanges.

"When Congress passed the health care act, they presented states a choice," Pruitt told the committee. "That choice was to establish a state health care exchange or to opt for a federal exchange. The ACA included with that choice a set of consequences and benefits."

While the subsidies would be withheld if the state opted not to set up an exchange, the states businesses would also be exempt from the mandate to provide insurance and the consequence fines for failing to comply.

Some healthcare experts have argued that the federally run exchanges will collapse if they cannot offer subsidies to people who qualify. The subsidies encourage people to sign up for insurance through the exchanges, widening the pool of people insured.

The administration is running a campaign-style outreach effort to sign enough people, and especially young people, up for the exchanges to make them financially viable. If 7 million people sign up for the exchanges, then 2.7 million of them have to be young to make the numbers work.

The administration and some legal experts have contended that the federally created exchanges are legally the same as the state-created ones and that the subsidies consequently can be applied to them.