This March, the Supreme Court will hear arguments in King v. Burwell, and sometime this summer they’ll render a verdict on whether the government can legally provide Obamacare tax subsidies for purchasing health insurance in the states that have federally administered insurance exchanges. It’s long been assumed that if the Supreme Court rules against the administration and cuts off the subsidies, then there will be chaos in the insurance markets, and widespread disruptions to the lives and well-being of many, many Americans. Now we actually have some data to give an idea of just how bad things would be.
The Obama administration published some data last week on Obamacare enrollment and the number of enrollees whose coverage is subsidized through federal tax credits. Although incomplete, the data provide a pretty good indication of just how critical those subsidies are to ensuring affordability and participation in exchanges operated by the feds. “On average, the report found that 87 percent of these customers were eligible for subsidies, with higher percentages in some states – up to a high of 95 percent in Mississippi,” the New York Times reported. That’s a bit of a misleading picture, since subsidies can vary wildly depending on income and, in some cases, are small enough so as to be negligible. But there’s no question that a high number of people would find themselves completely priced out of the insurance market.
How many people are we talking about here? Charles Gaba, the startlingly accurate cruncher of Obamacare enrollment numbers, did the math and came up with an estimate: “5-6 million customers across 37 states will suddenly be unable to afford their shiny new policies, and at the same time will no longer be legally required to have them. Many of them will thus drop their coverage, meaning quite a few insurance companies would lose upwards of 70-80% of their customer base.” Remember when the ACA was in its pre-implementation stage and conservatives were convinced it would naturally enter into a “death spiral” of low participation rates and skyrocketing premiums? That’s what the Supreme Court is threatening to inflict upon the law.
We’re getting a clearer picture of the massive social cost that would be paid were the court to rule for the plaintiffs in King, and the stakes only grow larger as more and more people sign up for coverage (and qualify for subsidies). The law’s proponents have long considered this a reason for hope that the justices (Chief Justice John Roberts, specifically) will want to avoid causing that sort of upheaval and vote to uphold the subsidies. But now the law’s Republican opponents in Congress are coming to grips with how bad things will be and are doing their best to reassure the court that the GOP will be able to handle the fallout of an anti-ACA ruling.
Republicans have zero interest in “fixing” the Affordable Care Act or saving it should SCOTUS tear it apart, but they are keenly aware of the need to do something to mitigate the potential damage. Politico reported this past weekend that the King case is forcing the Republicans to try and come to a consensus on an Obamacare “replacement” sooner than they had hoped (it’s only been five years, after all) so that they can communicate to the court that it can go ahead and gut the law. They’re completely open about their intentions. “The onus is on us to present a logical solution prior to that case ever being heard,” Sen. Richard Burr (R-NC) told Politico. “Maybe the court will feel more confident making a decision if in fact there is a legislation solution [to the subsidy problem] that is realistic.”
And then there’s this doozy of an observation of Sen. Ron Johnson, the Tea Party darling from Wisconsin, who facing reelection this cycle:
“If [the justices] do what I think they should do — if they really read the law and act according to the way the law is written — then we’re going to have a real problem in America,” said Sen. Ron Johnson (R-Wis.), who is up for reelection in 2016 in a state that Obama carried twice. “The American public’s going to be asking us to act at that point in time. So we’ve got to figure that out.”
When you step back and think about all the factors at play here, that’s an amazing quote. Even if you were to buy Johnson’s (and the King plaintiffs’) wildly contentious argument that this is merely a case of enforcing the law as written, the easiest and most painless way to fix the “real problem in America” would be a minor tweak to the existing legislation that would remove the potential for a crisis. But that simple act is politically anathema to the GOP. Instead, they want the court to blow up the law (which they acknowledge will be hugely problematic for many people) with the assumption that Republicans in Congress (who to this point have not been able to form anything close to a consensus on healthcare legislation) will be able to implement a post-hoc strategy for minimizing the damage. And even if the GOP does manage to come up with some legislative plan, it’s a good bet that it’ll have holes wide enough for many, many people to fall through.
What’s striking about all this is that no one is pretending that the Supreme Court wouldn’t screw up the lives of a lot of Americans with an anti-ACA ruling in King. But Republicans see it as their best chance to take down Obamacare, and they’re ready to put a few million people through that pain, uncertainty, and risk in order to realize their long-held political goal.