IRS scandal becomes Republican battering ram against Obamacare

Now playing in a political theater near you: The IRS scandal meets Obamacare.

Republicans in Congress are saying the scandal over Internal Revenue Service scrutiny of tea party and other conservative groups raises new doubts about President Obama’s health-insurance reform law.

The reason is that the health-care law gives the IRS an important role in things like administering tax credits, verifying whether people are eligible for subsidies, and checking whether citizens have complied with a new mandate to carry insurance or pay a fine.

“The power in our health-care system should belong to patients and their families, not politicians – and certainly not the tax man,” Rep. Andy Harris of Maryland said Saturday in the Republican Party’s weekly radio address. “Americans should be able to choose the coverage they need at a cost they can afford.”

This battle over Obamacare, officially known as the Affordable Care Act, is not new. House Republicans voted just this week to repeal it – their 37th such vote since its 2010 passage. Their criticisms have long included worries about an expansion of IRS power and overreach.

But the latest controversy about the IRS comes as the Obama administration is in a difficult home stretch of implementing the health law’s biggest elements – notably ensuring that health insurance “exchanges” exist in each state for Americans to use in sign-ups that begin later this year.

Even Democrats acknowledge that the administrative task is daunting. Republicans are painting the implementation as a tangle of bureaucracy that’s impeding job creation.

Congressman Harris introduced his brief address by saying that he was standing next to “Red Tape Tower,” some 20,000 pages of regulations tied to Obamacare. Then he brought up the role the IRS will play in implementation and enforcement of the act’s provisions. 
  
“If we’ve learned anything this week, it’s that the IRS needs less power, not more,” said Harris. He added: “It turns out that the IRS official who oversaw the operation that’s under scrutiny for targeting conservatives is now in charge of the IRS’s Obamacare office. You can’t make this stuff up.”

Republicans and Democrats alike have denounced the IRS in recent days for scrutinizing conservative groups seeking a tax exemption but not similar liberal groups. It’s not that the IRS has no business weighing the tax status of political groups – the lines for qualifying for a tax exemption can be fuzzy. But the widespread perception is that the IRS stepped over a line.

By extension, some IRS critics say, this raises the fear that some aspects of Obamacare implementation could be handled along partisan lines.

Some Democrats say it’s Republicans, not the IRS, that is overreaching when it comes to the health-care law.

The head of the IRS health-care office, Sarah Hall Ingram, was in charge of the tax exempt division in 2010, when agents first started improperly targeting conservative groups over their applications for tax-exempt status, according to The Associated Press.

"[But] there isn't any evidence that Sarah Ingram had any inkling of the problems" before she changed jobs to help implement the health-care law, Rep. Sander Levin (D) of Michigan said, according to the AP.

Biased or not, the tax agency has a large new role to play under the Affordable Care Act. But its job is just part of the law’s labyrinthine scope, which extends from an expansion of Medicaid for the poor to new rules that bar insurers from denying coverage on the basis of someone’s health status.

Republican critics say the Affordable Care Act, with its numerous regulations, will make health care more expensive and is making many businesses reluctant to hire new workers or to keep offering coverage to employees.

Supporters of Obamacare say that most businesses will continue health benefits, and that some 30 million more Americans will have health insurance under the law. Premium costs may rise for individuals buying insurance, but the law provides subsidies to help moderate-income households pay for it.

The law’s connection with the IRS was underscored in a 2012 US Supreme Court decision, which ruled that the law’s mandate on individuals – to buy insurance or pay a penalty – is constitutional because the penalty is in effect a tax.