The payments, called “cost-sharing reductions,” which will reach an estimated $130 billion over the next decade, help low-income enrollees afford their deductibles for health plans purchased through the ACA exchanges.
David Fisher, who served as the IRS’ chief risk officer at the time, told the House Ways and Means Committee that IRS officials questioned whether the ACA provided the Obama administration the authority to make cost-sharing reductions payments to insurers without an appropriation from Congress, according to the report.
Mr. Fisher said in his deposition that IRS officials questioned whether the ACA provided a “permanent appropriation” for payments as it does for premium tax credits. The administration argued that the same authority that enables it to provide the tax credits also allows covers the cost-sharing reductions because the two are “inextricably” linked in the structure of the law, according to The Hill.
Eventually, most IRS officials concluded the payments were legal after hearing the White House’s legal justification, and the Obama administration began handing out the funds.
But a federal judge this month ruled that the Obama administration overstepped its authority by disbursing the cost-sharing reductions payments without an appropriation from Congress. However, the administration will appeal the ruling, according to the report.
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