A Ruling Against Would Deny Half the Country Affordable Healthcare

May 07, 2015

Dean Baker
The Fresno Bee, May 7, 2015

View article at original source.

Bellingham Herald, May 7, 2015
Bradenton Herald, May 7, 2015
Hilton Head Island Packet, May 7, 2015
Beaufort Gazette, May 7, 2015
Carroll County Times, May 7, 2015
Hanover Evening Sun, May 7, 2015
Arcamax Publishing, May 7, 2015
Tribune News Service, May 7, 2015

The King V. Burwell case before the Supreme Court is ostensibly about whether the government can pay subsidies for insurance to millions of people in state exchanges established by the federal government.

However the implication of a ruling against the government goes far beyond the loss of subsidies.

If the Court rules against the government it will lead to the destruction of the exchanges in these states, denying half the country the security of being able to buy insurance if they can no longer get it through an employer.

In a less partisan court, it is unlikely this case ever would have gotten through the door. The whole case hinges on one sentence in a 1,700 plus page law that implies that subsidies are only supposed to be paid to people enrolled in exchanges created by states, not the exchanges established for the states by the federal government.

This interpretation is contradicted by wording in the rest of the law, which clearly indicates that subsidies were supposed to be paid to all people in exchanges.

It also contradicts the understanding of the members of Congress who voted on the bill. There is no public record of any member of Congress, either for or against the bill, who made a statement indicating they thought the subsidies would only be paid to people in exchanges established by states.

Ruling for the plaintiffs would also go against the principle of assuming that Congress passed a law that made sense. As is well known and has been widely debated, the law includes a mandate requiring that people have insurance.

However, there is an affordability exception, where people do not have to buy insurance if it would cost more than eight percent of their income. Without the subsidies, a huge percentage of the population would be exempted from mandate under this affordability clause.

If the Supreme Court rules against the government it will effectively be saying that Congress passed a law that made no sense. It would have been absurd to include a mandate with an exemption so broad that the mandate would not apply to the vast majority of the uninsured.

The implication is that almost no one would be required to buy insurance in the states without their own exchanges as a result of the mandate.

This outcome would also make the exchanges in these states unworkable. Without a mandate, many people, and especially healthy people, would opt not to buy insurance.

As a result, most of the people buying insurance in the individual market would be people in bad health. Insurance companies would then raise their prices to cover the costs of serving a population that is much less healthy than the population as whole.

This would leave us with the same situation we faced before the passage of the Affordable Care Act. Insurance in the individual market would be unaffordable to most of the population since it would be priced to cover the costs of an unhealthy pool of insured people.

If the Court cared about either the Constitution or the good of the country, it would not make a ruling with such dire consequences.

Of course if the motivation is advancing the Republicans’ political agenda, then destroying a successful and increasingly popular program created by the Democrats might be a good move.

There is one ironic outcome of a Court ruling against the government. It would mean that the whole country would be paying for subsidies that would go almost entirely to people living in Democratic states.

Of course the other states would have an easy remedy; they could set up their own exchanges. But that would require Republican politicians to acknowledge that Obamacare is a good thing.

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