Obamacare Schadefreude Goes to the Supremes

A round up of some reactions to the Supreme Court accepting the arguments for King vs. Burwell on Wednesday,  which will decide whether the Feds can offer subsidies to Obamacare customers in states which did not choose to create a state marketplace:

Obamacare saved? Not so fast

During Wednesday’s oral arguments, Kennedy raised a “serious constitutional problem” with the plaintiffs’ argument that four critical words in the law — “established by the state” — mean the Obama administration can give subsidies only to Americans who get their health insurance through state-run marketplaces, not the federal one that serves 34 states through HealthCare.gov.

Kennedy’s questions gave a big boost of confidence to Obamacare supporters, who insist that a reading of the full law shows it allows subsidies in all 50 states. Neal Katyal, a former acting solicitor general in the Obama administration, called it “an extraordinarily good day for the government.” White House press secretary Josh Earnest said the administration was “quite pleased.”

Still, legal experts point out that both sides got tough questions, that Chief Justice John Roberts’ views are a big mystery, and that oral arguments aren’t always decisive in the Supreme Court, anyway. And conservative legal scholars say they saw signs that the court could still decide that the key phrase has to be read literally, which would badly damage the Affordable Care Act.

If I was Justice Kennedy, I'd have a lot of fun making the statists think I was on on their side, and then screwing them in the decision. That may be one reason I'm not on the Supreme Court.

Obamacare channels Orwell

Toward the end of Wednesday's oral arguments in the latest Obamacare case to make it to the Supreme Court, Donald Verrilli, U.S. Solicitor General, argued that the administration's interpretation of the healthcare law was the most deferential to states. The argument, apart from coming from an administration that has consistently asserted a robust role for the federal government, was a bid to win over Justice Anthony Kennedy, a key swing vote, who raised concerns about the federalism implications of the suit.
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Verrilli argued that the law's text "is designed to afford state flexibility" and that the challengers' interpretation would contradict this. He added, "It would be an Orwellian sense of the word 'flexibility' to use it in the manner that petitioners say the statute uses it, because it's the polar opposite of flexibility." The implication was that this would be preposterous.

In truth, Orwellian semantics are a standard aspect of Obamacare, a law that's named the "Patient Protection and Affordable Care Act" even though in reality it has triggered the cancellation of individual health insurance plans, narrowed choices of doctors and hospitals, and jacked up the sticker price of insurance.

If you want to get a sense of how Orwellian the law actually is, just look at the section cited by Verrilli — 1321. It promises "state flexibility," as he noted, but starts by instructing the secretary of Health and Human Services (a federal official) to "issue regulations setting the standards for meeting the requirements" for states creating exchanges, offering health insurance through the exchanges and managing risk in the insurance market. It also says the federal government can impose "such other requirements as the Secretary determines appropriate." So any state that sets up an exchange must abide by a mountain of federal regulations and that it can only offer insurance policies that meet the federal definition.

The off ramp from Obamacare

If the court upholds Obamacare yet again, nothing much will change and the debate will go on through the current election cycle. But if the court strikes down the subsidies under discussion, the entire Affordable Care Act will be creaking and swaying, threatening to collapse. If that happens, everyone involved needs to be ready to move quickly.
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As far as the Democrats are concerned, in the early to middle stages of a presidential campaign with no incumbent on the stage, the only thing worse than losing Obamacare would be losing the chance to attack Republicans over Obamacare. The television commercials to which Sasse refers are very likely already in production, with teary eyed waifs tugging at their fathers’ shirt sleeves as they stand waiting to go into the hospital room to visit their dying mothers. The backlash at the state level could be far worse than any seen in the presidential race, with the new majority of Republican governors under the gun for having put so many of their citizens at risk by not having an exchange.

So what can be done to mitigate the damage? Sasse offers a fairly simply bandage.

We must not extend nor expand Obamacare. We need a completely different solution to help those caught in the Obamacare snare. That’s why, today, I am introducing the Winding Down Obamacare Act, which would use a Reagan-era law to solve Obama-era pain. We can adapt the COBRA law, signed by President Reagan in 1985, to help those who are in danger of losing their insurance through no fault of their own.
As those who have used COBRA know, it can be quite expensive, because the individual is expected to pick up the whole cost. In a post-King moment, Congress can provide some help in the immediate wake of a correctly decided but disruptive Supreme Court case. Much like the tax credit Senator Jim DeMint (R., S.C.) proposed in 2009, and that’s been used with COBRA before, we can provide a tax credit that offsets 65 percent of the costs of an individual’s current plans.

I don't know about this one, but I'm inclined against it. It simply substitutes one subsidy for another with a different name, and  fails to address the millions of people who lost health insurance because Obamacare outlawed their plans.

Alito's wildcard could shape 2016

Before oral arguments in the latest healthcare case to reach the U.S. Surpreme Court, analysts focused on the instant chaos that would be unleashed if justices invalidated subsidies that millions of Americans have been relying on to help them purchase insurance through President Obama's healthcare law.

But during Wednesday's arguments in King v. Burwell, Justice Samuel Alito floated an idea that would scramble this narrative. In the event that the justices determine that the IRS acted illegally by approving subsidy payments to individuals who purchased insurance through a federal exchange, Alito suggested the Court could issue a "stay" of such ruling. This could trigger a serious debate on healthcare policy and have new ramifications for the 2016 presidential race.

As explained by Jonathan Adler, a Case Western Reserve University law professor who was one of the intellectual architects of the Kingchallenge, a stay could simply be the Court invalidating the subsidies, but declaring that its order wouldn't go into effect until the new tax year.
The thinking would be that individuals, businesses, and states would have made a set of decisions based on the assumption that the subsidies would be flowing, so it would be unfair to change that policy in the middle of the tax year without adequate time to adjust.

A different set of Supremes has the best response to that proposal:



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