How an Obamacare Loss Means a Loss for Republicans

Patrick Egan in the Washington Post argues that the GOP stands to lose if the Supreme Court rules in favor of the plaintiffs in the Obamacare subsidies case, King v. Burwell.

“Dealing with King v. Burwell wouldn’t just be a national problem for the GOP; it would even more profoundly be a local problem for the party. As political scientists Theda Skocpol and Lawrence Jacobs have observed, most of the states that refused to start their own exchanges are either Republican strongholds or those that happened to be under Republican control at the time the exchanges were established. Making things worse for the GOP is that many of these Republican-controlled states have also opted to reject the ACA’s expansion of Medicaid eligibility to those just above the poverty line. As RAND has noted, this has forced more of these states’ residents to rely on tax credits — and thus the federal exchange — to pay for health insurance.”

“The upshot is that a ruling for the King plaintiffs would require millions of red-state Americans to pay more for their health insurance, while leaving many blue-state residents completely untouched. This is shown in the chart [above], which plots the share of each state’s residents estimated to lose tax credits if the lawsuit succeeds against the share of the two-party vote received by Republican Mitt Romney in the 2012 presidential election.”

GOP: Total Obamacare Repeal is Impossible

Politico: “The GOP’s months-long debate over when and how to send a repeal of Obamacare to the president’s desk now appears to have an answer. They can’t do it all at once.”

“Repealing the law ‘root and branch’ is probably out of the question, the chamber’s parliamentarian is hinting, because some parts of Obamacare don’t affect the federal budget. That’s a must in order to use the obscure procedure known in Senate parlance as reconciliation, which allows lawmakers to avoid the 60-vote filibuster hurdle and pass bills on a simple majority vote.”

“That’s not the GOP’s only problem. Under those rules any Obamacare repeal has to reduce — not increase — the deficit. So Republicans will have to pick and choose which parts of the Affordable Care Act they most want to ditch.”

“The entire process has the makings of a difficult political exercise that will reveal something about the GOP’s priorities when it comes to the reviled law, forcing the party to go beyond the pile-on repeal rhetoric and say specifically what it would do and how it would pay for it.”

“The King case is the big X factor in all of this. Should SCOTUS knock down subsidies, most Republicans agree they’ll need to either extend them legislatively or replace the federal help with a health care tax credit. Both options cost money, which would again scramble the reconciliation puzzle.”

Report: GOP Obamacare Plans Won’t Stave Massive Disruption of Insurance Market

The Hill: “Republicans have spent months pitching ideas on how to limit the potential fallout from next month’s Supreme Court decision that could wipe out ObamaCare insurance subsidies in at least 34 states.”

“But so far, none of their proposals are likely to stave off the massive disruption of the healthcare marketplace that would result from a ruling against the Obama administration, according to a new report by the American Academy of Actuaries.”

“The changes to the risk pool would be particularly costly for insurance companies because they cannot make mid-year adjustments to their rates if the court rules against the subsidies.”

“’That’s the big worry. That’s really the biggest worry for most us working in the field, the fact there’s no ability to reset things,’ said the report’s author, Cathy Murphy-Barron, who has spent 25 years as a health policy actuary.”

“Another popular Republican plan — a temporary extension of premium subsidies — also drew criticism from the American Academy of Actuaries, which warned that it would only ‘delay the market disruption.’”

GOP Split Over Obamacare Alternatives

Wall Street Journal: “A month before the Supreme Court is expected to rule on a key component of the Affordable Care Act, congressional Republicans are split over their strategy for handling the possible fallout.”

“Republicans, who control both houses of Congress, are divided over whether to extend temporarily the health law’s tax credits if the court voids them in most of the country. An extension, some lawmakers say, would buy them time to enact a broader overhaul of the 2010 health law they have long opposed.”

“But some conservatives want the Republican Party to hold firm and refuse any reauthorization of the credits for the law they call ‘Obamacare.’”

“That group of more than 30 lawmakers hasn’t taken a formal position on the issue, but conservative opposition could make it hard to pass legislation in the House.”

“’That view suggests Obamacare was the right answer and that’s not what Republicans promised last fall,’ said Rep. Tim Huelskamp (R., Kan.). ‘This is a golden opportunity. If Republicans squander this opportunity to repeal and replace Obamacare, they squander an opportunity to actually win the White House. It’s not the time to support and extend Obamacare.’”

Party That Wins Obamacare Lawsuit Could Be the Loser

Associated Press: “The party that wins the impending Supreme Court decision on President Barack Obama’s health care law could be the political loser.”

“If the Republican-backed challenge to the law’s subsidies for lower-earning Americans prevails, the GOP would have achieved a paramount goal of severely damaging “Obamacare.” But Republican lawmakers would be pressured to help the millions of Americans who could suddenly find government-mandated medical coverage unaffordable — and they’d face blame from many voters if they failed to provide assistance.”

“Should the Obama administration win, relieved Democrats would crow that Obama’s foremost domestic achievement had stood unscathed. But some say they’d have lost a potentially powerful cudgel for the 2016 campaigns: Being able to accuse Republicans of ending the assistance and disrupting health coverage for many.”

“Not everyone thinks their party will lose politically should they win in court. Many Republicans say if the Supreme Court rules that subsidies were provided illegally, it would be the Democratic administration’s fault for doing so, not the GOP’s.”

Obamacare Lawsuit: An Empty Suit?

Jonathan Chait comments on the latest news related to the Obamacare subsidies case “reassuring those of us who followed the health-care debate when it happened that we are not completely insane.”

“It is difficult to convey to people who don’t follow health care for a living just how preposterous the lawsuit against Obamacare has become. The original theory behind the lawsuit seized upon a tiny drafting error.”

“At the beginning of the legislative process, the law’s authors assumed that states would be happy to build their own exchanges. As it proceeded and the backlash reached a fever pitch, Congress realized that Republican states might boycott the exchanges, and created the federal exchanges as a fallback. But they failed to correct every line in the text, leaving one stray passage that assumes exchanges will be created by a state.”

“And so we are left with a lawsuit that is likely to gain at least three, and possibly as many as five, votes on the Supreme Court despite the fact that it rests on a history that is almost literally insane. Even those of us who have a low estimation of the intellectual standards of the conservative movement have been astounded by its ability to persuade itself of a historical theory so clearly at odds with reality.”

Obamacare’s Survival Threatened by a ‘Drafting Error’

Robert Pear in the New York Times: “They are only four words in a 900-page law: ‘established by the state.’”

“How those words became the most contentious part of President Obama’s signature domestic accomplishment has been a mystery.”

“The answer, from interviews with more than two dozen Democrats and Republicans involved in writing the law, is that the words were a product of shifting politics and a sloppy merging of different versions. Some described the words as ‘inadvertent,’ ‘inartful’ or ‘a drafting error.’ But none supported the contention of the plaintiffs, who are from Virginia.”

“The plaintiffs say the law allows subsidies only where marketplaces have been ‘established by the state.’ It is a distinction that those who drafted the law say they did not intend to make.”

“At the Finance Committee, which thrashed out its version of the bill in September and October 2009, senators initially assumed that all states would set up exchanges, so they added a section to the Internal Revenue Code to provide subsidies, in the form of tax credits, for insurance purchased through an exchange.”

“Senators authorized a backup plan to allow the federal government to establish an exchange in any state that did not have its own, but they failed to include that language in the section of the tax code providing subsidies. ‘We failed to include a cross-reference to the federal exchange,’ [Christopher Condeluci, Republican staff lawyer] said. ‘In my opinion, due to a drafting error, we overlooked it.'”


The SCOTUS Obamacare Case: Who Will Blink First?

Jeffrey Toobin: “Sometime next month, the Supreme Court will decide King v. Burwell, and the conventional wisdom about the stakes in the case appears to have shifted.”

“It has come to seem that Obamacare’s Republican opponents are most at risk if the decision goes their way. They have the most to lose by winning … So that’s the theory: millions will suddenly be uninsured, and will blame Republicans.”

“No, it’s not. If the Obama Administration loses in the Supreme Court, the political pain will fall almost exclusively on the President and his Party … President Obama will have broken health care, so he owns it. To the vast mass of Americans who follow politics casually or not at all, Obamacare and the American system of health care have become virtually synonymous. This may not be exactly right or fair, but it’s a reasonable perception on the part of most people. The scope of the Affordable Care Act is so vast, and its effects so pervasive, that there is scarcely a corner of health care, especially with regard to insurance, that is unaffected by it. So if millions lose insurance, they will hold it against Obamacare, and against Obama. Blaming the President in these circumstances may be unfair, but it’s the way American politics works.”

“Playing chicken with the Justices only works if it works. If the Supreme Court strikes down the subsidies, the Administration will also have to answer for why it didn’t prepare for this possibility.”

GOP’s Obamacare Plan? ¯\_(ツ)_/¯

New York Times: “At precisely 3:56 p.m. on Thursday, Senator Chris Murphy, Democrat of Connecticut, introduced a popular Internet symbol for a careless shrug of the shoulders — ¯\_(ツ)_/¯ — into the Congressional record, holding it up on a placard and describing it as ‘a pretty good summary of what the Republicans’ plan is,’ if the Supreme Court strikes down the Affordable Care Act this summer.”

Jonathan Chait points out that a lack of a Republican plan has “induced a wave of panic … among Republicans. The chaos their lawsuit would unleash might blow back in a way few Republicans had considered until recently, and now, on the eve of a possible triumph, they find themselves scrambling to contain the damage. It is dawning on the Grand Old Party that snatching health insurance away from millions of helpless victims is not quite as rewarding as expected.”

King v. Burwell “works more on the level of an elaborate prank than as a serious reading of the law. And yet it stands at least some chance of success … That prospect has grown suddenly unnerving because, unlike previous Republican efforts to strangle the law, the current one comes as Obamacare is functioning extremely well.”

“The party remains doctrinally committed to the complete destruction of Obamacare … This doctrine will now put Republicans in the position of endangering the lives of sick Americans who will lose access to their medical treatment.”

States Contemplate Obamacare Exchange Mergers

The Hill: “A number of states are quietly considering merging their healthcare exchanges under ObamaCare amid big questions about their cost and viability.”

“Many of the 13 state-run ObamaCare exchanges are worried about how they’ll survive once federal dollars supporting them run dry next year.”

“Others are contemplating creating multi-state exchanges as a contingency plan for a looming Supreme Court ruling expected next month that could prevent people from getting subsidies to buy ObamaCare on the federal exchange.”

“The idea is still only in the infancy stage. It’s unclear whether a California-Oregon or New York-Connecticut health exchange is on the horizon.”

“But a shared marketplace — an option buried in a little-known clause of the Affordable Care Act — has become an increasingly attractive option for states desperate to slash costs. If state exchanges are not financially self-sufficient by 2016, they will be forced to join the federal system, HealthCare.gov.”

CBO Director: Obamacare Subsidies Were Meant For All States

The Hill: “The man who led the Congressional Budget Office when ObamaCare was being constructed said Tuesday it was the ‘common understanding’ at the time that subsidies would be available in all states — a crucial question in a looming Supreme Court case.”

“The challengers in the case of King v. Burwell argue subsidies are only available in states that established their own exchanges, as opposed to a federally-run exchange, citing language in the law referring to an exchange ‘established by the state.’
Part of the challengers’ argument is that Congress could have intended to bar the subsidies from federally-run exchanges as an incentive for states to create their own.”
“’It was a common understanding on the Hill, again on both sides of the Hill, on both sides of the aisle, in late 2009 and early 2010, that subsidies would be available through the federal exchange as well as through state exchanges,’ Doug Elmendorf said in an interview at the Peterson Foundation fiscal summit.”
“’And I’m confident in saying that because CBO’s analysis always worked under the view that subsidies would be available under the federal exchange.’”

Republicans Scramble for Obamacare Alternative

The Hill: “About one month before the Supreme Court’s ruling on ObamaCare subsidies, Republican lawmakers are all over the map about what to do about the millions of people who could lose them.”

“Republicans have widely agreed they need a plan if the high court strikes down a subsidies next month. But the GOP does not agree about how to help people who’d lose access to healthcare — and even whether to help them at all.”

“’There is one view that Congress can leave the subsidies in place for a short period of time until there are alternative solutions available,’ Rep. Bill Flores (R-Texas), chair of the conservative Republican Study Committee, said.”

“There’s another view that says, ‘Look, this problem was created by the way the Democrats wrote the law. Why should Republicans suddenly wind up with ownership over that problem?’”

Rep. Bruce Poliquin (R-Maine) argued “If [the subsidies] are ruled unlawful, it will be incumbent upon Congress to help create a thoughtful free market replacement for ObamaCare, and an off-ramp for the six million individuals who have in good faith purchased ObamaCare policies.”

A Huge Hit For Some States If SCOTUS Rules Against Obamacare

The Fiscal Times: “If the Court rules against the administration in the high-stakes case of King v. Burwell, an estimated 9.8 million could become uninsured in states that rely on the federal exchange, Healthcare.gov, says a new study from the Urban Institute and the Robert Wood Johnson Foundation (RWJF).”

“The report estimates that in the event of such a ruling, the 20 states that did not set up their own exchange or expand their Medicaid programs under the Affordable Care Act would lose an estimated $721 billion in federal funding over the next decade. The study said these 20 states would lose $41 billion in federal spending in 2016 for not expanding Medicaid, and another $21 billion would be lost if the federal subsidies stop flowing.”

“States that have not expanded Medicaid have the most to lose in the King v. Burwell decision if they are not already running their own marketplaces because people with incomes between 100 and 138 percent of the federal poverty level would not get any assistance in affording healthcare,’ the study said.”

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