Not long ago, I ran across a photo of the Supreme Court captioned: “Maybe this will turn out to be . . . Obamacare’s death panel?”
The caption refers to the widespread belief that when the Supreme Court rules on the latest challenge to Obamacare (“King vs. Burwell”), it will strike down most of the government subsidies that have made insurance affordable for so many middle-income and low-income families. (This lawsuit has been financed by the “Competitive Enterprise Institute,” a libertarian group with long ties to tobacco disinformation campaigns, and more recently, climate change denial. The Koch brothers are among the funders of the institute.)
The Supremes are expected to announce their decision in June. If Obamacare’s opponents prevail, the healthcare.gov system will have no choice but to cut off subsidies for as many as 7.5 million Americans in 34 states, including Texas and Florida, probably within a few weeks after the ruling is announced. The Kaiser Family Foundation has put together an eye-opening map revealing where subsidies are safe, and where they are at risk.
The plaintiffs’ argument turns on just five words buried in the 900-page Affordable Care Act (ACA). In a paragraph describing the tax credits that will be available to people buying policies in online marketplaces, known as “exchanges” the law describes them as “exchanges established by the state.”
Seizing on that last phrase, the libertarians who masterminded this legal challenge gleefully point out that only 16 states opted to set up their own insurance exchanges. The remainder of the marketplaces were established by the federal government.
Ergo, the plaintiffs’ lawyers conclude, 34 states cannot legally offer subsidies to their citizens!
As a point of fact, if a person reads the entire ACA, he or she will discover that the law also is very clear that, if a state refuses to open an exchange, the federal government will “establish and operate such Exchange within the State.”
An Absurd Argument
When the IRS drafted its rules for implementing the ACA it realized that, of course, Congress intended to make subsidies available both in the state and in the federal exchanges.
By fixating on only five words, the plaintiffs’ lawyers ask the Court to ignore the broader goal of the “Patient Protection and Affordable Care Act”: universal healthcare.
As Jeffrey Toobin put it in the New Yorker earlier this month: “the King case is notable mostly for the cynicism at its heart. Instead of grandeur” –which is more typical of cases brought to the highest court in the land– “there is a smallness about this lawsuit.”
I agree. The plaintiffs are concocting an argument based on semantics, not ideas. It is not that the ideologues bringing this case don’t understand the core mission of the ACA. They do. They know that the goal is to provide affordable health care to all Americans.
But Obamaca’re opponents are quite coolly and cynically ignoring that mission while plucking a phrase out of the legislation, hoping that, if they sharpen it, by repeating it and harping on it, they can use it to carve the heart out of Obamacare.
Think about it: if subsidies disappeared in 34 states, millions would no longer be able to afford their insurance. At that point, young healthy Americans would drop their policies, leaving the insurance pool filled with sicker, older patients who felt they had no choice but to buy coverage–even without the government’s help.
In order to pay for their care, insurers would hike premiums, and as rates levitated, more and more healthy customers would cancel their coverage. This in turn would trigger what experts call a “death spiral” as premiums rose to unaffordable heights, and insurers simply stopped offering coverage in many states.
To believe that legislators meant to offer subsidies only to people who happened to live in states that create their own exchanges is to believe that the law was consciously designed to self-destruct.
Nevertheless this is what the law’s challengers are claiming, and on March 4 the Court will begin hearing oral arguments.
The Media Whips Up Suspense
As that date approaches, the folks who create news have been flogging the story with headlines like these:
After all, the media know that fear sells. And if they can persuade the public that this case is a cliffhanger, their audience might follow it for weeks.
2012 All Over Again
HealthBeat readers may remember that this is exactly what happened back in 2012 when the Supremes heard a challenge to Obamacare’s “individual mandate.”
I wrote about that case on March 26, 2012, the day that the Court began to hear oral arguments.
At the time, I observed: “For months, the media has been feasting on the story, calling it ‘The Case That Could Change Health Care Forever.’ Yesterday, the Baltimore Sun declared: ‘The most important six hours of recent American history will start to unfold on Monday.’
“No question” I admitted, “the story is sizzling. And I hate to be a wet blanket. But let me suggest that the hullaballoo is totally unwarranted
“I cannot believe for a minute that this Court wants to go down in history as the Gang of Nine that quashed the most important piece of legislation that Congress has passed in 47 years. If the Court strikes down the Obama administration’s signature legislation . . . it risks undermining its own credibility, shredding what is left of its reputation for political neutrality.”
So I was not surprised in June of 2012 when the Court confirmed that Obamcare’s individual mandate was constitutional, ruling 5 to 4, with Chief Justice Roberts providing the swing vote.
This time around, I expect that SCOTUS will once again stand by the ACA, for many of the same reasons.
A More Seasoned Perspective
The media’s memory is short. Its mandate after all, is to focus on today’s news.
By contrast Jim Jaffe is a pragmatic and experienced beltway observer. For 16 years, he worked for House Democrats who served on the Ways and Means Committee, apprenticing with Representatives Green, Gibbons and Gephardt before being hired by Chairman Dan Rostenkowski where he was, as he puts it, “the staff person/henchman (depending on your perspective) assigned to dealing with the media.”
Jaffe has seen the same movie more than once, and knows that, no matter how they grandly they posture, both politicians and Supreme Court Justices are constrained by the reality of what has happened in the past. The court calls it “precedent.” They cannot just wipe the slate clean and start over. And this applies to Obamacare’s critics on the left as well as its enemies on the right.
Last week, I received an email from Jaffe, a long-time HealthBeat reader.
“Health reform isn’t newsworthy any more,” Jim Jaffe wrote, “instead, we call it history.” I know Jaffe and I realized that when the said that the Affordable Care Act is “history,” he meant that it’s a “done deal”–here to stay.
To illustrate his point he also sent me a column that he had just published on the Huffington Post titled “The Health Reform War Has Been Won.”
There, he concedes: “There will continue to be attacks from extremists in caves on both sides who refuse to acknowledge that the war is over and continue to lob grenades in an effort to enlarge consumer choice (from the right) or enact a single-payer scheme (from the left), but these are becoming increasingly irrelevant minor distractions.”
It might seem cavalier to call “King vs. Burwell” a minor distraction. After all, if you take the challenge seriously, the stakes are enormous. But as Jeffrey Toobin has pointed out “there is a smallness about this lawsuit.” It is petty, and the legal basis for the challenge is flimsy.
Why the ACA is “History”
- The Affordable Care Act passed Congress five years ago.
- Since then the Republicans in Congress have tried to repeal or defund the ACA 67 times. Sixty-seven times they have failed.
- In 2014 about 8 million people signed up for private insurance coverage.
- This year, 11.4 million enrolled.
- Approximately 85% of those who purchased insurance in the Exchanges this year received subsidies—and they expect to get them next year
- Obamacare is beginning to move toward its ultimate goal: the share of Americans who are uninsured has plummeted from 18% in the 1st quarter of 2013 to 13.4% in the 3rd quarter of 2014.
In other words, the train hasn’t just left the station; it has crisscrossed the nation—leaving its track marks all over a health care system that accounts for about one-fifth of GDP. Obamacare has created jobs, and has steered investments to confom with, and take advantage of, the ACA.
But it is not just its effect on the economy that is important: the ACA has transformed cultural expectations in a way that cannot be rolled back.
This challenge came too late. If Obamacare’s opponents had managed to bring it to the Court before people began to receive subsidies, it might have had a chance (assuming the majority of the court was willing to vote its politics, and not the law.)
Let me be clear: when I say that the ACA is now part of history, I am not suggesting that it is set in stone. Over time Obamacare will be refined and, no doubt, improved.
Healthcare 2.0 will begin in 2016 when a new Congress and White House begin to refine the legislation. As Sarah Kliff has reported on VOX, experts who helped Democrats craft the original legislation already are discussing changes, with an eye to lowering costs while improving quality. It’s possible that these could include lowering deductibles, and letting Medicare negotiate with drug-makers for lower prices.
Some in Washington say that “’the Democrats did health care,'” Zeke Emanuel, senior fellow at the Center for American Progress and a former Obama advisor on health policy told Kliff. But “You don’t ‘do’ health care once. You do health care forever. It’s not a marathon. It’s life.”
Yet even while the law will be refined, the main provisions of Obamacare will survive. Without the individual and employer mandates, the penalties and the subsidies, the overarching goal– universal healthcare– would be impossible.
Yet media pundits once again have persuaded some that President Obama’s landmark legislation is about to be “gutted.” At the very least, the talking heads seem to be convincing other talking heads. (Like reporters who all hang out at the same bar during a war, pundits tend to listen to and read each other.)
But I am not convinced. Indeed, I will go further: What can’t happen won’t.
As a practical matter, as I argue in the posts below, if the Court ruled against Obamcare, the fall-out would be too great, undermining our economy, the social contract between government and its citizens, and the integrity of the Supreme Court itself. Finally, in the end the GOP would take the hit, and Chief Justice Roberts knows this.