Fighting the Illegal Family Glitch Fix

I wrote in my newsletter on Friday about the Biden administration’s attempt to further expand Obamacare through an illegal regulatory action to try to “fix” the “family glitch.”  

Galen and Heritage Senior Fellow Doug Badger took the lead in writing a comment letter opposing the rule, with feedback and help from Paragon President Brian Blase. We submitted the letter over the weekend with a total of 36 signatories. Brian Blase sent out this news release yesterday: Fighting IRS’s Unlawful and Misguided Expansion of Obamacare Subsidies.  

You can’t help but conclude that the administration is pushing this effort primarily to further expand Americans’ dependence on government programs. If the rule is finalized, taxpayers would spend at least $45 billion over 10 years to largely replace the private health coverage people have today with Obamacare plans.

From our letter: “Very little of this new spending would expand coverage…The Urban Institute … estimates that, of the 4.8 million who would be made eligible for tax credits, only 190,000 would have been previously uninsured.  

“The rule would thus necessitate an enormously inefficient use of federal resources. The rule would also be inflationary, growing federal deficits and raising prices throughout the economy.”

The Biden administration is attempting to overturn longstanding federal regulations that concluded dependents are not eligible for taxpayer subsidies if a family member is eligible for affordable health insurance at work.

The Treasury and IRS now conclude that the original regulatory interpretation was mistaken.  We disagree:  “This proposed rule adopts an impermissible reading of the statute that is contrary to law. 

“In addition to lacking a basis in statute, the proposed policy would harm many of the families it purports to help, impose new financial burdens on states, and increase the federal debt and inflation without appreciably expanding health insurance coverage. 

“…finalizing this rule will signal that the IRS can be pressured to change its enforcement of the tax code based on the political interests and whims of the White House. The agencies should withdraw the proposed rule.”

Republicans on the House Judiciary Committee today sent a letter to Treasury and the IRS, reinforcing many of our arguments.

The comment period is now closed.  We will await the administration’s response to the points made in our letter.