• Publications Feature Chris Condeluci's Reaction to Conflicting ACA Subsidy Rulings
  • August 1, 2014 | Author: Christopher E. Condeluci
  • Law Firm: Venable LLP - Washington Office
  • This week, two federal court rulings offered contradictory interpretations of a key component of the Affordable Care Act (ACA). A federal appeals court in Washington, DC ruled that Congress did not provide for subsidies on health insurance policies purchased through federal exchanges, a ruling consistent with the wording of the law. Within hours, a Virginia appeals court ruled the opposite way, a move more in line with Congressional intent. Venable counsel Chris Condeluci, who served as tax counsel on the Senate Finance Committee when the bill was drafted, reacted to the dueling decision in the July 23, 2014 editions of Forbes, CFO Magazine, and Vox.

    “Congress always intended for the federal exchanges to do everything the state exchanges do, one of those things being the federal subsidy,” Condeluci told Forbes. “I can say, even as a Republican, Congress always intended this, we just didn’t indicate it through legislative history because the process was so screwed up.” Throughout the article, Condeluci details the back and forth of how the ACA eventually became law and what led to the different opinions. He said a full repeal of the law likely is not an option due to the amount of money spent by industry and hospitals to comply with the law. Condeluci called the current situation as a missed opportunity to reform the nation’s healthcare system. “We realized that something needed to be done. We realized also it was likely to happen because the Democrats held the White House and both houses of Congress,” he said. “We hoped because of our involvement we’d be able to influence the process so we’d have a much more workable, feasible piece of legislation as opposed to a more regulatory, higher-taxes type of law that ultimately passed.”

    Speaking with CFO Magazine about the DC court’s ruling, Condeluci said, “That court said it wasn’t going to rewrite the law, that the statute was clear.” However, he disagrees with the ruling. “I was in the room when that provision was being drafted,” said Condeluci. “The subsidies were not created so the states would set up exchanges. All the members around the table wanted every state to have an exchange, but we all naively thought the states would want to as well. The main reason we came up with the federal fallback is because we recognized that some states might not get their act together in time to have an exchange up and running by Jan. 1, 2014. It was a bridge. We never anticipated all those states saying no.”

    In an interview with Vox, Condeluci said, “It was always intended that the federal fallback exchange would do everything that the statute told the states to do, which includes delivering the subsidies.” He explained that the problems with the law occurred because it passed without going through conference committee where errors like this probably would have been fixed. “You're taught in law school to not look strictly at statute, but to try and look elsewhere to try and interpret what the heck Congress meant,” Condeluci added. “At the end of the day, this should have never happened, and is a product of the rushed way the law was passed.”