Is Obamacare In Jeopardy?

Obamacare Ruling

Noah Feldman asserts that “the ACA is not yet quite dead. But there’s blood in the water, and the great whites in robes are circling.” McArdle assesses the damage to Obamacare:

Much will depend on the courts: Does the case get en banc review, does that review rule for the government, and if so, will the plaintiffs be able to push an appeal all the way to the U.S. Supreme Court? Will the Supreme Court expose itself to more outrage from whichever side they rule against? All that is unknown. We do know this much: this was a big blow for the government, and a potentially fatal one for the administration’s signature legislative achievement.

But Emily Bazelon expects the government to prevail:

[I]t is the D.C. Circuit’s ruling that is probably going nowhere beyond a victory lap by the strategic conservative lawyers who brought this case, and a round of postmortem hand-wringing among law professors, who are already deriding the decision. That is because the legal reasoning of the majority in D.C. is seriously unconvincing, and as Slate contributor and UC–Irvine law professor Richard Hasen quickly pointed out, the next stop on the legal train is the D.C. Circuit as a whole, where today’s result will likely be reversed.

Bloomberg View’s editors weigh in:

Obamacare isn’t dead. And given the flimsy logic of the latest legal argument against it, there’s a good chance it never will be. … The legal battle now moves to the full D.C. Court of Appeals and perhaps from there to the Supreme Court. The worst-case scenario is that the strict-constructionist view of the dispute will prevail. Even then, however, Obamacare can survive — if state policy makers take the opportunity to set up their own exchanges.

Ingraham provides the above chart, which shows how many current enrollees would be impacted if federal exchange subsidies are banned. Kevin Drum also imagines what would happen if SCOTUS sides with Halbig’s plaintiffs and “in a stroke, everyone enrolled in Obamacare through a federal exchange is no longer eligible for subsidies”:

What happens is that people in blue states like California and New York, which operate their own exchanges, continue getting their federal subsidies. People in red states, which punted the job to the feds, will suddenly have their subsidies yanked away. Half the country will have access to a generous entitlement and the other half won’t. … You’d have roughly 6 million people who would suddenly lose a benefit that they’ve come to value highly. This would cause a huge backlash. It’s hard to say if this would be enough to move Congress to action, but I think this is nonetheless the basic lay of the land. Obamacare wouldn’t be destroyed, it would merely be taken away from a lot of people who are currently benefiting from it. They’d fight to get it back, and that changes the political calculus.

Ponnuru’s similar thoughts:

Neither party should be confident about how those consequences would play out. Democrats in states without their own exchanges could put pressure on Republicans to establish exchanges or see many people pay higher premiums. Republicans nationally have never made clear how they would replace Obamacare without stripping coverage from millions of people. That failure could become a bigger political problem for them if the courts ultimately conclude that a lot of exchange participants aren’t eligible for subsidies.

Nicholas Bagley also considers the consequences of Obamacare’s opponents prevailing:

If that happens, the states with federally established exchanges will come under enormous pressure to establish their own exchanges. In turn, the federal government would want to make it as easy as possible for those states to convert to state-established exchanges.

Ideally, HHS would also want to relieve states of the need to develop new exchange infrastructure. Rollout challenges in Oregon and Massachusetts, not to mention, suggest that getting a website up and running isn’t such a simple task. What if the refusal states could just enact laws (or sign executive orders) saying they’ve “established” their exchanges, but let continue to run them?

He admits that “not every state would accept the invitation to establish its own exchange, even if doing so were more or less a formality,” but he suspects “lots of states would, especially as voters started to howl about losing their tax credits.”