The Greatest Threat To Obamacare, Ctd

Ezra explains why the King v. Burwell case could destroy Obamacare:

Robert Laszewski warns that “the immediate impact of King would be nothing short of devastating in the 37 state individual health insurance markets––on and off the federal exchanges”:

I have been a critic of Obamacare. But I also believe the way to solve this is through the political process where change can occur in a way that provides those now covered a soft landing during the transition, not in the courts where an affirmative finding for King would instantly destabilize the insurance markets in these states leaving millions uncovered until each of the states – or the federal government – could work out a solution.

Cohn sizes up the possible damage to Obamacare:

One analysis, from the Rand Corporation, suggested that overall enrollment in the “non-group” market (that is, people buying insurance on their own) would decline by 70 percent. Another analysis, using a model developed by economist Jonathan Gruber and cited in an amicus brief signed by several dozen health policy scholars, suggested that the result of eliminating tax credits in the affected states would be 6.5 million additional people without health insurance.

Margot Sanger-Katz outlines what will remain if the anti-Obamacare side wins:

The Medicaid expansions, now underway in 27 states, would stand. Young adults would still be able to get coverage through their parents’ health insurance. The law’s reforms of Medicare payment policy would stay on the books. Regulations on insurance companies limiting their profits and requiring that all products cover certain basic benefits would stay in effect. And the subsidies flowing to states that ran their own exchanges would continue. An anti-Obamacare decision in the King case wouldn’t take the health law off the books. It would just make federal spending on health care more uneven than it already is.

Noah Feldman thinks it all comes down to Roberts:

What will Roberts do now? He took substantial heat from conservative critics who were astonished and horrified to see the lifetime conservative betray the cause at its moment of potential judicial triumph. One possible interruption is that, scarred by this experience, Roberts would now go along with the conservative tide. The continuing unpopularity of Obamacare in opinion polls combined with the obvious weakness of President Obama after the midterm elections would provide some support for this possibility.

The other possibility is that Roberts will not deviate from his judicial restraint centrism. To strike down Obamacare now, having upheld it before, might look like opportunism or wishy-washy-ness. Given how weak the law increasingly appears, it would be a high price for Roberts to pay before the judgment of history if he now struck it down. Indeed, such a decision would vitiate his earlier restraints.

Cohn also wonders what SCOTUS will do:

Legal experts tell me that Roberts’ past rulings indicate he’d be sympathetic to arguments that Courts should defer to executive agencies when it comes to interpreting what laws mean. If so, he’d take the government’s side and reject the lawsuit. But if we’ve learned anything in the last few years, it’s that the Court is unpredictable, particularly when it comes to Obamacare.

Brianne Gorod isn’t panicking yet:

[R]egardless of whether the Court should have heard the case now, there can be no doubt about what it should do now that it’s hearing it. Non-partisan judges applying straightforward principles of statutory interpretation should easily conclude that the ACA not only allows, but requires, that tax credits and subsidies be available on federally facilitated exchanges. That alone should give confidence to anyone who’s worried about the fate of the Affordable Care Act. But for anyone who remains worried because they interpret the Court’s decision to hear the case as a sign of where the Justices are on the merits, there’s one more thing they should remember: it takes four votes to hear a case, but five to decide it. So it’s way too soon for ACA opponents to celebrate.

Jonathan Adler, on the other hand, buys the challengers’ arguments:

Of course the ACA’s supporters hoped tax credits would be available in all 50 states, just as they hoped the Medicaid expansion would be available in all 50 states.  In both cases, they expected states to cooperate. Time and again ACA proponents said states would create their own exchanges.  What no member of Congress ever said during deliberations over the ACA, however, is that there would be tax credits in federal exchanges. Despite years of looking, not a single contemporaneous statement making this simple claim has been found.  That Congress did not anticipate that states might refuse to create exchanges, and did not consider whether the law adequately addressed that potentiality, does not give the IRS or the courts the authority to correct the legislature’s handiwork.  Congress chose to enact what even its supporters recognized was a flawed bill, because there were not enough votes to craft an alternative and because, in their view, a flawed bill was better than no bill.  Most preferred the exchange provisions embodied in the House health care reform bill, but that was not what Congress enacted.

Kliff reports on Congress’s intent:

For staffers who helped write Obamacare, though, there isn’t really a debate at all. The answer, for them, is crystal clear: they definitely meant to have subsidies available in all 50 states, regardless on who ran the marketplace.

“It was always intended that the federal fallback exchange would do everything that the statute told the states to do, which includes delivering the subsidies,” says Chris Condeluci, who worked as tax and benefits counsel for the Senate Finance Committee Republicans during the Affordable Care Act debate.

“The evidence of Congressional intent here is overwhelming,” John McDonough, who worked on the Health, Education, Labor and Pension committee during the health reform debate, wrote in an email. “There is not a scintilla of evidence that the Democratic lawmakers who designed the law intended to deny subsidies to any state, regardless of exchange status.”

Sean Trende counters such objections:

Opponents of the lawsuit emphasize that absolutely no one intended for the law to function this way.  There’s some debate over whether this is actually the case, but I’m personally skeptical that the law enacts the intent of those who were voting on it. But the crucial fact in understanding this lawsuit is that, while a more liberal judge might be inclined to accept this, this is not how conservative judges tend to approach statutory interpretation. For them, the question isn’t “What did Congress want to pass?” It is “What did Congress pass?” As Justice Antonin Scalia put it: “Congress can enact foolish statutes as well as wise ones, and it is not for the courts to decide which is which and rewrite the former.”

 concedes that the “the smart money is that the Supreme Court will vote to overturn King and throw most of the exchanges into chaos”:

Some blue states would have their own exchanges, but many others would not. Worse still, the fact that the core benefits of the ACA – the historic Medicaid expansion and the regulated exchanges – would be largely confined to blue states would make it much easier for a unified Republican Congress and White House to repeal the ACA entirely.

It’s very likely, in other words, that John Roberts is on a crusade to slowly poison the ACA to death without issuing a single high-profile ruling holding the ACA unconstitutional. First, he rewrote the Medicaid expansion in a way that denies health insurance to millions of poor people (while not even meaningfully protecting state sovereignty). And now, Roberts might be ready to join the court’s other Republicans to destroy most of the exchanges based on legal arguments that are even more dubious.

Chait imagines the political aftermath of a ruling against Obamacare’s subsidies:

NFIB v. Sebelius came out a year and a half before Obamacare was up and running. The victims of the ruling had not yet started getting coverage. Indeed, many of them still aren’t aware that their state is denying them free health care in order to spite Obamacare. States that refuse to build their own exchange, on the other hand, would be denying subsidies to millions of people who already get them. People are extremely loss-averse, and react much more viscerally to the government eliminating an existing benefit than denying a hypothetical one.

The second difference is that the exchanges service a more affluent breed of consumer. Medicaid beneficiaries are extremely poor. The very poor vote at the lowest rates, and Republican budget proposals tend to saddle them with the steepest cuts. They are, in other words, a constituency most Republicans are willing or even eager to target. The exchanges, on the other hand, reach well up into the middle class.

Sargent also games out the political implications:

“Repeal until now has been symbolic,” [the Kaiser Family Foundation’s Larry] Levitt tells me. “If SCOTUS were to disallow the subsidies, the Republican decision in response would all of a sudden have serious consequences.”

And there are other reasons this might not be so easy. If SCOTUS does this, Levitt adds, “the insurance market would collapse in these states. Congress couldn’t possibly do nothing at that point. There would be tremendous pressure from the insurance industry, and the health care industry generally, to fix this.”

Now, it’s very possible Republican members of Congress – and GOP governors – would not fix it. But at least the true consequences of their health care stance would now be nakedly apparent.

But Waldman doubts that Republicans will pay a price:

This is a country where people shake their fists at their members of Congress and say, “Tell the government to keep its hands off my Medicare!”, where people like their state Obamacare exchange but hate Obamacare, where people approve of almost everything this law does but disapprove of the law itself. You think the public as a whole is going to understand this lawsuit and know who to blame? Don’t bet on it. They’ll only know that now they can’t get insurance anymore. “Obamacare took away my subsidy!” they’ll cry. And Republicans will laugh and laugh.

Earlier analysis of the case here.