WASHINGTON – Today, during a U.S. Senate Appropriations Legislative Branch Subcommittee hearing, U.S. Senator Chris Murphy (D-Conn.) – leader of the Senate Democrats’ #ACAWorks campaign – questioned Congressional Budget Office Director Dr. Douglas Elmendorf on the issue of whether insurance subsidies were designed to flow to all Americans, not just those in state-based exchanges. Dr. Elmendorf’s response indicated that CBO’s analysis throughout Congressional consideration of the ACA in 2009 and 2010 assumed that such subsidies would be available in every state. This gets at the heart of the King v. Burwell Supreme Court case and is more clear evidence that Congress never intended or expected subsidies to be available only in states with state-based exchanges.

Last week, the Supreme Court heard arguments in King v. Burwell, the GOP’s latest misguided attempt to derail the American health care system by eliminating tax credits for individuals in 34 states who enrolled through the federal health care exchange. Just today, the Department of Health and Human Services released a report that underscored the importance of insurance subsidies. It found that 87 percent of enrollees in Healthcare.gov states qualified for an average tax credit of $263 per month. A flawed and politicized decision in the case would strip more than 8 million Americans of health coverage under the ACA, put insurance markets across the country at risk of collapse, and endanger the lives of millions who need health coverage but will not be able to afford it without tax credits.

Below is the text of Murphy’s exchange with Elmendorf:

Murphy: Thank you very much, Madam Chair. It’s a pleasure to sit on this committee with both of you and let me add my appreciation to you, Dr. Elmendorf, for your service. This is, I think, the first time that you’ve been before any of the committees that I serve on while I’ve been in the Senate, but while I was a member of the Energy and Commerce committee – during the healthcare debate and the energy debate – we got a lot of chances to speak to each other.

You know, one of the great frustrations to members of Congress is CBO’s independence, and you really truly are an independent body. That means that you do your own interpretation, your own read of the statutes that we pass. We don’t tell you what they mean; you do your own derivation and analysis, and then attach numbers to it. And so, I wanted to, in that context, ask you a question about probably the most important case pending before the Supreme Court right now, which is King v. Burwell.

This is a pretty simple question as to whether the Affordable Care Act posits and allows for subsidies to go to states with federal exchanges and state exchanges, or whether subsidies are allowable only to states that have set up their own state exchanges. So I guess my question is pretty simple: how did CBO read the law, as to this question of whether subsidies would go to federal and state exchange participants or, as the petitioners in this case believe, only to state exchange participants? What was CBO’s read? What did you base your numbers off of when you did your analysis of the law?

Elmendorf: Well, Senator, our estimates for the Affordable Care Act have always included subsidies flowing to people buying insurance through those exchanges whether the exchanges were being run by the federal government or state governments. And we wrote in a letter to Chairman Issa a few years ago, and I quote, “to the best of our recollection, the possibility to those subsidies would only be available in states that created their own exchanges did not arise during the discussions CBO staff had with a wide range of congressional staff when the legislation was being considered”.

Murphy: When CBO comes to a place in which they may have questions about the interpretation of a statute, how do you deal with those questions? Do you just ask congressional staff or do you do your own interpretation of the totality of the statute and the totality of the record?

Elmendorf: Well Senator, we read legislation and apply our judgment about its effects, but we did not conduct a full legal analysis of the Affordable Care Act, of the thwart that some people may have then and certainly have since then. CBO has three attorneys on our staff, they read legislation with our analysts; they also handle all of the legislative needs of the agency as an operating organization, so we do try to read the legislation that we see carefully, but we are not pouring over it with a sort of full legal analysis that you may be suggesting.

Murphy: But again, your analysis was that the Affordable Care Act allowed for subsidies to go state and federal exchanges, thus you priced it based on those.