It’s not often that a political figure does journalists the courtesy of giving a specific time and date for when they will say something flagrantly untrue. But in two weeks, Sen. Orrin Hatch (R-UT) will deliver the keynote address at a Heritage Foundation event called: “King v. Burwell: Why the IRS Obamacare Handouts Should Lose at the Supreme Court.” In those remarks, Hatch will almost certainly make the now-familiar argument that the Affordable Care Act’s subsidies for purchasing health insurance were never meant to be paid out through the 36 state-based insurance exchanges set up by the federal government. And every word that passes through Hatch’s lips will be false.
We know this because Hatch, like every other Republican in Congress at the time of the Affordable Care Act’s passage, operated under the assumption that the law’s subsidies were universal. Many of his criticisms of the ACA were rooted in the idea that subsidies would be paid out through every exchange, regardless of which entity set the exchange up. He believed this because it was true, but now that the ACA’s future is imperiled by the King plaintiffs’ exotic interpretation of the law, he’s come around to believing something entirely different from what he once knew.
Last month, ThinkProgress’ Ian Millhiser dug up a January 2010 Op-Ed Hatch co-wrote for the Wall Street Journal in which he argued explicitly that eligibility for subsidies was not a condition of the state agreeing to set up its own exchange, and that this was one of the law’s constitutional weak points:
A third constitutional defect in this ObamaCare legislation is its command that states establish such things as benefit exchanges, which will require state legislation and regulations. This is not a condition for receiving federal funds, which would still leave some kind of choice to the states. No, this legislation requires states to establish these exchanges or says that the Secretary of Health and Human Services will step in and do it for them. It renders states little more than subdivisions of the federal government.
So that’s pretty bad for Sen. Hatch’s case – but it gets so much worse. In October 2011, Hatch gave a speech, also at the Heritage Foundation, on how the Affordable Care Act was destroying the economy. In his remarks he sketched out what he envisioned would happen over the next few years as the law was slowly implemented. In Hatch’s view, the whole law was a designed-to-fail scheme that would tip the country towards single-payer healthcare, and at the center of this devious conspiracy were the subsidies for purchasing individual insurance.
According to Hatch, the ACA’s employer mandate would impel businesses to stop offering employer-sponsored coverage, which would force their workers into buying subsidized coverage from the state exchanges. So many employers would drop coverage, he argued, that the flood of workers seeking government-subsidized insurance would send costs soaring to the point that they become completely unmanageable, at which point Obama would argue for giving up and just transitioning to single-payer.
Here’s the relevant portion of Hatch’s remarks:
As predicted by conservative critics of the law, the impact of these increases in premiums will actually undermine access to employer-provided coverage. The first real evidence of this impact on coverage was in the results of a survey issued by McKinsey. That survey found that 30 percent of employers planned to dump their coverage due to Obamacare. And after 2014, when the employer-mandate kicks in, among those with the greatest knowledge of the law, 50 percent plan on dropping coverage for their employees.
The initial reaction to this study by those who supported the health care law was to shoot the messenger.
A more forthright assessment, however, came from Howard Dean, who only objected to Obamacare because it was not liberal enough. He recently stated that the study’s results were in fact true and actually good for small business because they would be encouraged to dump their employees into the new health insurance exchanges.
I suppose good is all in the eyes of the beholder.
From my perspective, it is not good for the employees who are losing their health coverage, and it is not good for the taxpayers who will wind up footing the bill for all of this.
It is not even clear that it will be good for employers.
After all, we know how this story will end.
In short, the cost curve will continue on its upward trajectory, and the only question will be how to pay for it.
There is little doubt in my mind as to what the preferred liberal solution to this mess of their own making will be. First, they will blame private insurers. According to this theory, it is only because Obamacare failed to go for the whole enchilada, and force single-payer on the nation, that costs were not brought under control. I am confident that a reelected President Obama will quickly throw up his hands and demand that his health law be transformed into a single-payer one-size-fits-all Washington-driven system.
Of course, if past is prologue and the success of government price controls in Medicare is any guide, the ability for the government to truly rein in costs will prove inadequate. And so hampered with a growing number of exchange eligible persons due to employers dropping coverage, and the inadequacy of existing premium support, they will no doubt seek to fill the gap with new taxes directly on employers and indirectly through increased taxes on high income individuals, taxes that hit small business income disproportionately.
Hatch’s theory makes no sense unless he assumed universal eligibility for federal subsidies. He all but said so in his swipe at Howard Dean, saying that the influx of workers into the state exchanges was “not good for the taxpayers who will wind up footing the bill for all of this.” And it’s hard to think he’d be so concerned about the “growing number of exchange eligible persons due to employers dropping coverage” if he believed that state-level resistance to Obamacare would deny them subsidies.
So in 2011, Orrin Hatch not only believed that subsidies would be available on every exchange, he considered it one of the law’s more pernicious features, a sort of Trojan horse for single-payer that Obama and the liberals had sneaked past everyone. Now he’s set to argue the exact opposite: that the people who wrote the law obviously meant to withhold those same subsidies. Either he lied then or he’s lying now. Or both.