Supreme Court split on Obamacare subsidies
As Supreme Court Weighs Health Law, G.O.P. Is Planning to Replace It.
On the docket was King vs. WASHINGTON — The legal campaign to destroy President Obama’s health care law may be nearing its conclusion, but as the Supreme Court deliberates over the law’s fate, the search for a replacement by Republican lawmakers is finally gaining momentum. The lawsuit asserts that the 2010 law bars health insurance subsidies for residents of three dozen states that relied on the federal government to set up their individual health insurance exchanges rather than doing so themselves.
But the prospects of legal victory have also raised practical and political fears that Republicans will take the blame for the health care crisis that would follow. If the plaintiffs prevail, about 7.5 million residents of federal-exchange states would be at risk of losing their insurance because they depend on the tax subsidies to make their coverage affordable. With the court’s four liberal justices clearly ready to side with the administration, and three conservatives clearly lined up in opposition, Roberts, and perhaps Justice Anthony M. Donald Verrilli, advised the court on Wednesday that it gets worse: Many would have to drop their coverage, leaving only the sickest residents in the insurance pool. Ryan of Wisconsin, Fred Upton of Michigan and John Kline of Minnesota, the chairmen of the powerful committees that control health policy, proposed what they called an “off ramp” from the Obama health act that would let states opt out of the law’s central requirements.
The Post neglected to consider that such a ruling would leave Affordable Care Act subsidies subject to the whims of each new administration’s interpretation — hardly a reasonable course of action. That would raise the cost of insurance, driving even more people out and dooming the insurance markets in those states to “death spirals.” At oral argument, Justice Anthony Kennedy seemed disinclined to knock out the subsidies in those federal-exchange states. At stake is whether more than 7 million low- and moderate-income taxpayers can continue to receive subsidies that make their health insurance affordable.
A decision striking down the law as unconstitutional would have been vilified by President Barack Obama, Democrats and liberal mainstream media heavy hitters. The tax credits will be cut off immediately and you will have very significant, very adverse effects immediately for millions of people in many states in their insurance markets.” Alito replied: “Would it not be possible if we were to adopt Petitioners’ interpretation of the statute to stay the mandate until the end of this tax year as we have done in other cases where we have adopted an interpretation of the constitutional…or a statute that would have very disruptive consequences such as the Northern Pipeline case?” “Sure,” said Verrilli. “Northern Pipeline is an example of doing that, and it will be up to the court to decide whether it has the authority to do that.” Northern Pipeline Construction Co. v.
Even a freshman, Senator Ben Sasse of Nebraska, proposed a major but temporary expansion of Cobra — the program that allows workers to extend their employer-based health benefits after leaving a job — to ensure that people do not lose insurance coverage as Washington rushes to find an alternative. Roberts decided that penalties to force people to sign up for insurance could be construed as a tax, and thus the law was constitutional under the government’s taxing authority. But the one substantive comment he did make has received intense scrutiny from lawyers and others trying to forecast whether the healthcare law will survive or be largely unraveled. Political commentator Jonathan Chait has written that conservative healthcare proposals tend to reflect the “Heritage Uncertainty Principle,” a takeoff on the Heisenberg uncertainty principle of physics, which states that certain aspects of reality can never be determined.
His point, referring to the right-wing Heritage Foundation, was that “conservative health-care policies do not exist in any real form” — they’re put forth only to counter whatever plan Democrats are offering, and they evaporate the moment anyone tries to take them seriously. The health-care act says such subsidies go to those who buy insurance off an exchange “established by the state.” The problem for the law’s backers is that only 13 states and the District of Columbia established exchanges. Importantly, in order to avoid massive disruption of recently completed bankruptcy proceedings, the plurality opinion, penned by William Brennan, only applied prospectively, and the judgment of the court was stayed until October, in order to allow Congress some time to revisit the statute. The latest GOP plans are a bit different; they’re more like Potemkin health plans, like the roadside Potemkin villages supposedly erected by Catherine the Great’s courtier Grigory Potemkin to give her a false impression of prosperity in the Russian countryside.
Most states opted out because the law has been unpopular thanks to the way it was muscled through Congress with only Democratic votes and the falsehoods that got it passed — if you like your insurance, you can keep your insurance, if you like your doctor, you can keep your doctor. But by eliminating the requirements for businesses to offer insurance and for most people to have insurance, he added, “we could go into a death spiral in the individual insurance market because healthy people won’t buy it.” Republicans say they are ready for that argument. In what is destined to become the most famous exchange of the session, he asked Verrilli: “You really think Congress is just going to sit there while all of these disastrous consequences ensue?” Verrilli replied: “This Congress, your honor?” (You can hear Verrilli’s disbelief, and laughter it provoked among court spectators, in the audio of the oral arguments posted on the court website; the exchange with Scalia starts at the 55:35 mark.) As for the proposals themselves, Sen. Ben Sasse (R-Neb.) suggested in a Wall Street Journal op-ed last month that residents of the affected states be permitted to keep their subsidies for 18 months if the court rules against them.
But Justice Antonin Scalia pointed out the unambiguous language, saying the law “means what it says.” What’s more, there’s evidence that the language was written to lure states into establishing exchanges. Two years ago, in a dissent he wrote in a case involving the Federal Communication Commission, he said he had a “fundamental” disagreement with giving regulators the benefit of the doubt in all cases. Ben Sasse (R., Neb.) introduced the first bill, the “Winding Down Obamacare Act,” aimed at mitigating the disruption that may be caused by a Supreme Court ruling favoring the challengers. Ted Cruz (R-Texas) offered a measure to repeal the ACA’s individual mandate, exchanges and subsidies, but to allow people to buy health insurance across state lines. This ancient GOP proposal would launch a race to the bottom in which health insurance would be offered only from states with the loosest, most industry-friendly standards.
The trio would keep the health law’s most popular elements: allowing children to stay on their parents’ policies until age 26, prohibiting lifetime coverage limits and protecting people with existing health problems. But if Chief Justice John Roberts is worried about the disruptiveness of ruling in the challengers’ favor, Alito’s approach may be enough to alleviate his concerns. For a couple earning $32,000, or about twice the federal poverty line, the GOP plan would slash the subsidy nearly in half, as Brookings Institution social insurance expert Henry J. Burwell, Republican leaders seem to have dropped the pretense that they’ll have even a transitional measure ready by June, when the court is expected to rule. “We’ll do our best,” Hatch said Thursday. “But we’ll have to see.” It’s the old bait-and-switch — but all bait, and no switch. Read his blog, the Economy Hub, at latimes.com/business/hiltzik, reach him at email@example.com, check out facebook.com/hiltzik and follow @hiltzikm on Twitter.
The rest of us were smart enough to realize this was a fraud being perpetrated on the American people by a corrupt Administration and Democratic Party. If ever there was a time when the Majority Leaders of Congress needed to act like Reid and Pelosi, NOW is the time for Boehner and McConnell to get ruthless, just like their Democratic counterparts have been since 2006. Unless and until Democratic members of Congress get it through their thick heads that they, too, have been had by the Liberal left, veto proofing a repeal is impossible.
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