April 17, 2013 4:31PM

Questions for Secretary Sebelius

Secretary of Health and Humans Services Kathleen Sebelius has been making the rounds on Capitol Hill, testifying in favor of President Obama's proposed budget and generally trying to assure members of Congress that all is well with ObamaCare implementation. Even supporters of the law are freaking out nervous, as I discuss here.

Since everyone else is pestering Sebelius with questions, I thought I would post some questions I would like to hear her answer.

Funding for state-established Exchanges

  1. The Patient Protection and Affordable Care Act gives you essentially unlimited authority to spend money to encourage states to establish Exchanges through the end of 2014. Is that correct?
  2. And you have told states that, whatever grants you approve by midnight on December 31, 2014, states can draw down that money for up to five years, through 2019. Is that correct?
  3. Only 17 states—just one out of every three states—has agreed to take on the task of establishing an Exchange. Is that correct?
  4. According to The Hill, last year your department said it would spend $2 billion to encourage states to establish Exchanges by the end of this year, but in the president’s budget it says HHS will spend more than double that amount, $4.4 billion. Is that correct?
  5. Is there a dollar amount beyond which you will not go? Is there a dollar amount at which you will say, that’s enough, we’re just wasting other people’s money?

Funding for federal Exchanges

  1. Congress has not appropriated any funds to HHS for the purpose of establishing health insurance Exchanges under the Patient Protection and Affordable Care Act. Is that correct?
  2. Yet HHS is spending taxpayer dollars establishing federal Exchanges. Is that correct?
  3. If Congress has not appropriated any funds for the creation of federal Exchanges, then HHS is necessarily diverting funds from an authorized purpose to an unauthorized purpose. Is that correct?
  4. Where is HHS getting the money it is using to establish federal Exchanges, if not from a specific appropriation?
  5. How many taxpayer dollars has HHS spent so far to create federal Exchanges?

The IRS’s illegal tax-credit rule

  1. According to a recent law-journal article and a lawsuit filed by the state of Oklahoma, the Patient Protection and Affordable Care Act clearly authorizes, and Congress clearly intended, subsidies to private insurance companies and taxes on employers only in states that establish a health insurance Exchange. Yet a final rule issued by the IRS would tax employers and issue those subsidies in the 33 states that have opted for a federal Exchange. The Harvard Law Review has said the Oklahoma lawsuit raises an interesting issue that perhaps the Supreme Court should address. Are you aware of that journal article and that Oklahoma lawsuit?
  2. Prior to the IRS issuing its proposed rule, did you or anyone else at HHS have any communications with the Treasury Department or IRS on the issue of whether those subsidies would be available through federal Exchanges?
  3. What about between the proposed rule and the final rule?

Medicaid expansion and deficits

  1. When a state chooses to implement the PPACA's Medicaid expansion, that results in federal outlays. Is that correct?
  2. If a state decides not to implement the expansion, then that money will not be spent. Is that correct?
  3. When a state chooses not to expand Medicaid, that decision reduces federal deficits below currently projected levels. Is that correct?

HHS violating NFIB’s Medicaid remedy

  1. In its ruling in NFIB v. Sebelius,the Supreme Court held that if the federal government threatens to withdraw all Medicaid funds when states fail to implement the PPACA’s Medicaid expansion, that would be coercion. Is that correct?
  2. The Court ruled, quote, “In light of the Court’s holding, the Secretary cannot…withdraw existing Medicaid funds for failure to comply with the requirements set out in the expansion.” Is that correct?
  3. On July 10, 2012, just two weeks after the Court’s ruling rendering optional, quote, “the Medicaid expansion,” you wrote governors that states have the freedom to decline only the provisions regarding newly eligible adults. Is that correct?
  4. It is therefore your department’s position that if states fail to implement other Medicaid provisions in the PPACA—such as when HHS determined that Maine ran afoul of maintenance-of-effort—then the Secretary retains the authority to withdraw all federal Medicaid grants to the state. Is that correct?
  5. When discussing the Medicaid expansion, the Court also wrote, quote, “The Affordable Care Act expands the scope of the Medicaid program and increases the number of individuals the States must cover. For example, the Act requires state programs to provide Medicaid coverage to adults with incomes up to 133 percent of the federal poverty level” (emphasis added). Is that correct?
  6. The Court also wrote, quote, “Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level” (emphasis added). Is that correct?
  7. These passages show that the Court did not limit its remedy to newly eligible adults, the way your department claims. Newly eligible adults are an “example” of how “the expansion” would cover “the entire nonelderly population” below 138 percent of poverty. Your department is thus arbitrarily limiting—and thereby violating—the Supreme Court’s ruling by continuing to coerce states into implementing mandatory Medicaid coverage for children below 138 percent of poverty, maintenance-of-effort, the new MAGI income standard, eligibility determinations for Exchanges, and so forth. HHS’s policy directly conflicts with these passages from NFIB, which show that Court rendered optional more than just the coverage for newly eligible adults. Isn’t that correct?
  8. You claim the Court applied its remedy only to the enhanced match for newly eligible adults. Yet the Court cites that new funding stream only to show the expansion seeks to “transfor[m]” Medicaid from “a program to care for the neediest among us” into “an element of a comprehensive national plan to provide universal health insurance coverage.” At no point does the Court use the enhanced match to define the parameters of “the Medicaid expansion” or otherwise limit the scope of its remedy. Isn't that correct?
  9. Can you please point to the specific passages in NFIB where the justices limit either “the expansion” or their remedy to provisions tied to the enhanced match?

The president's proposal to rescind Medicaid DSH cuts

  1. The president has proposed eliminating the ACA's cuts to Medicaid DSH payments in 2014. This is just an admission that the ACA will not reduce uncompensated care or reduce the deficit, isn't that correct?


  1. For almost four solid years, dating back before its enactment, public opinion polls have shown the Affordable Care Act is unpopular with the American people. It was passed on a purely partisan basis. You have said you did not expect the political opposition this law has received. You have said this law is extremely difficult to implement. Sen. Max Baucus (D-MT), the primary author of this law, says he expects a “huge train wreck” when you try to implement it later this year. Sen. Jay Rockefeller has said the the Affordable Care Act is “the most complex piece of legislation ever passed by the United States Congress” and “just beyond comprehension.” All of which suggests that a lot of the law's supporters didn't even know what they were enacting. Would you say the Affordable Care Act lacks legitimacy?