Good News Everyone!

Good news everyone! The Alexander-Collins ACA stabilization bill funds the CSR portion of BHPs for plan year 2018. Crisis averted!

Well… is it?

Back in August, I hypothesized that BHP funding may be unaffected by CSR funding. I would currently mark that as incomplete given what has occurred since. The administration decided that I was wrong, cut off that funding and then NY and Minnesota sued. If this bill is passed, the lawsuit would be rendered moot since they are narrowly suing for the moneys they expected but did not receive (completely reasonable, of course). To recap: this bill appropriates funds for the CSR component of the 2018 BHP funding, which is the subject of a lawsuit.

This bill does 2 other things (I guess it technically does a lot more than 2 things but for our purposes, 2 things): it appropriates funds for CSRs permanently and it appropriates funds for 1332 waivers. Most people think that by funding CSRs, we move on from the BHP funding headache. The argument goes that since BHP funding is 95% of APTC and CSRs, which both have permanent appropriations, then it has a permanent appropriation.

Before I go any further, I need to note that I am not a lawyer and this could all be completely incorrect. But I’ve been deep into BHPs long enough to feel pretty confident about this.

My original post about BHPs makes a long and complicated argument that the funding for BHPs should be unaffected by whether or not CSRs are paid. There is a key wrinkle to that analysis that I am stuck on. Here, I will unapologetically quote myself:

BHP sits in a funding purgatory very similar to CSR. Technically, no moneys were ever appropriated to fund the program. The primary difference between the two, at this time, is that a court has ruled that no appropriation exists for CSR and therefore any payments are unconstitutional. There is very little difference in how the law was written for CSR and BHP from a funding perspective. Neither program had moneys appropriated within the text of the law. No appropriation has occurred separately. It seems quite possible that BHP could face the same fate as CSR. But at this time it hasn’t.

The argument is that the money that is used to pay states for their BHP programs is not the same as the money that is used to pay for APTCs (funded because it’s a tax credit) and CSRs (funded separately and arduously through this bill). I know that everyone has always assumed this to be the case, but just a few mental leaps will take you from the hypothesis that BHP funding should be unrelated to CSR funding to the hypothesis that BHPs have not been funded.

The primary argument for this is the phrase “would have been provided”. That is how the law refers to the APTCs and the CSRs that are used in the formula to calculate the federal funding amount for BHPs. By saying “would have been provided”, the law is saying that in the presence of a BHP, APTCs and CSRs are *not provided*.

If the ACA suggests that APTCs and CSRs are not provided to an individual enrolled in a BHP, then is the money used to fund that BHP the same as APTC and CSR money? I suppose some legal gymnastics could bring one to the conclusion that, yes, BHP money is simply a redirection of APTC and CSR money. On the other hand, the argument that this is an entirely separate pool of money seems a little more straightforward to me.

So where does that leave us? It seems clear that there is a legal argument to be made that BHP funds are not appropriated. But does it matter? I don’t know. It probably doesn’t matter since no one is challenging it. But it makes me nervous that only exactly a small portion of the BHP funds are appropriated in this bill.