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Obamacare Fight Carries Risks for Republicans in 2016 Swing States

July 23 (Bloomberg) -- President Barack Obama’s signature initiative and the cost of health coverage for millions of Americans were cast into doubt after two federal appeals courts issued opposite verdicts on whether the government can subsidize policies through federally run insurance exchanges. Megan Hughes reports on “In The Loop.” (Source: Bloomberg)

To appreciate the complex political calculations Republicans now face in attacking Obamacare, consider this: Almost 1.4 million people could lose coverage in Ohio, Florida and Virginia, the three largest presidential battleground states, if the courts side with the law’s critics.

In Florida alone, 984,000 residents enrolled through Obamacare to get health-insurance coverage, with 91 percent receiving tax credits to lower their premiums.

Those subsidies are the subject of several lawsuits brought by opponents of the Affordable Care Act. Two appellate courts this week issued conflicting rulings on their legality, with a Virginia court upholding the federal aid and a Washington, D.C., panel rejecting it.

The decisions highlighted the changing climate Republicans confront as millions of Americans become accustomed to the access to coverage and expanded benefits under the law that remains anathema to much of the party.

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“It’s a short-term win for the Republicans,” said Republican strategist John Feehery. “It gives them momentum, but long term it’s a bit more complicated.”

Republicans have made an assault on the health-care law, President Barack Obama’s biggest legislative initiative, the focus of their election campaign this year, as they did in both the 2010 and 2012 races.

Photographer: Ty Wright/Getty Images)

House Speaker John Boehner, an Ohio Republican, seized on the Washington appellate court ruling, saying it’s “further proof that President Obama’s health-care law is completely unworkable.” Close

House Speaker John Boehner, an Ohio Republican, seized on the Washington appellate... Read More

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Photographer: Ty Wright/Getty Images)

House Speaker John Boehner, an Ohio Republican, seized on the Washington appellate court ruling, saying it’s “further proof that President Obama’s health-care law is completely unworkable.”

The party can now add poor legislative craftsmanship to the torrent of criticism against Obamacare, and rev up Republican loyalists for the midterm congressional election, Feehery said.

‘Start Over’

House Speaker John Boehner, an Ohio Republican, seized on the Washington appellate court ruling, saying it’s “further proof that President Obama’s health-care law is completely unworkable.” Senator Lamar Alexander, a Tennessee Republican who’s also running for re-election this year, said the decision should prompt Obama to work with Republicans to “start over” on overhauling the nation’s health-care system.

The Fate of Obamacare

Still, candidates will face a quandary if courts ultimately side with challengers and limit subsidy payments to only those policies issued through state-operated insurance marketplaces.

Thirty-six states, mostly with Republican governors or Republican-dominated legislatures, refused to set up state exchanges, forcing residents to instead purchase insurance through the federal exchange, commonly known by its website healthcare.gov.

Those states include Ohio, Florida and Virginia. Florida has 29 electoral votes, tying it with New York for third-most among all the states. And Ohio is a bellwether, having voted for every presidential-election winner since 1964.

Political Pressure

Republican congressional leaders would come under pressure to assure that their constituents continue to receive the subsidies if a court decision strikes them down -- particularly when those who live in mostly Democratic “blue” states with their own exchanges are still getting them, Feehery said.

“It’s hard to see a bunch of blue states enjoying the fruits of this health-care law and then have red states out in the cold,” said Feehery, president of Washington-based QGA Communications. “Once people get hooked on these subsidies, it’s awfully hard to take them away.”

Among the 24 states covered by the federal exchange that Republican presidential nominee Mitt Romney carried in the 2012 election, 2.9 million people had health coverage obtained through the marketplace as of April 19, according to Department of Health and Human Services data.

‘Negligible’ Impact

Allies of the White House said they don’t think the court rulings will damage efforts to expand enrollment. Ron Pollack, executive director of Washington-based Families USA, predicted “negligible” impact.

Even so, he urged administration officials to respond quickly to any unfavorable court ruling to stress that the subsidies will continue uninterrupted and that the legal challenge is unlikely to prevail.

White House spokesman Josh Earnest hit those themes when he briefed reporters immediately after the decisions were handed down within hours of each other on July 22.

“It’s important for people all across the country to understand that this ruling does not have any practical impact on their ability to continue to receive tax credits right now,” Earnest said.

The government said it plans to ask the full U.S. Court of Appeals in Washington to review the three-judge panel’s decision, and has 45 days to make the request, according to court rules. A bid for a so-called en banc rehearing would have to be approved by a majority vote of the 11 judges on the bench who would review the case. Seven were appointed by Democratic presidents and four by Republicans.

Status Quo

The current regulations governing Obamacare, including those for the tax credits, remain in place while the case is litigated. Even if the full appeals panel rules against the government, the judges probably would freeze their ruling so the government could file an appeal with the U.S. Supreme Court, said M. Miller Baker, an appellate lawyer at McDermott Will & Emery in Washington.

Eliminating tax credits as contemplated by the Washington ruling probably wouldn’t occur until the government exhausts its options, a process that would take at least a year, Baker said. “As a practical matter, that result will not take effect until the Supreme Court ultimately rules,” Baker said.

Republicans are making the health-care law the centerpiece of their effort to wrest control of the Senate from Democrats and add to the Republican majority in the House.

Anti-Obamacare Ads

Twenty-seven percent of general-election television ads by Republican candidates and friendly outside groups featured an anti-Obamacare message during the week ended July 20, according to data compiled by Kantar Media’s CMAG.

That reflects a pervasive animosity toward the health-care law among the Republican rank-and-file. Seventy-two percent of Republicans say they don’t think Obamacare has helped any American families compared with 17 percent of Democrats and 49 percent of independents, according to a July 18-20 CNN/ORC International telephone poll.

The small number of voters who cast ballots in midterm congressional elections compared with presidential elections makes that intensity especially potent, said Jennifer Duffy, a senior editor for the Cook Political Report, a Washington-based group that tracks elections.

“This is a turnout election,” Duffy said. “Obamacare gets Republican voters energized.”

Even so, the Republican message has shifted as the campaign progresses from an intraparty primary to a general election, said Elizabeth Wilner, a senior vice president for Kantar Media.

Shifting Message

Republican TV advertisements on Obamacare in primary campaigns most often stressed a call to repeal the law, Wilner said.

In contests that have moved to the general election phase, ads more often criticize an incumbent Democratic senator as “the deciding vote” for the 2010 health-care law and as a supporter of the president’s legislative agenda, she said.

It’s a subtle though significant difference.

“That’s a catch-all attack: If there’s anything about this law you don’t like you can blame this senator,” Wilner said. “It makes Obamacare part of the agenda of an unpopular president.”

That message also doesn’t directly threaten coverage or subsidies for those who may like them, she said.

Stanley Greenberg, a Democratic pollster who advised former President Bill Clinton, said the messages used in the Republican general-election commercials “have more to do with linking Democrats to Obama than the Affordable Care Act.”

The most closely contested Senate races are in states unfriendly to the president. Six incumbent Democrats up for re-election this year are running in states that Romney won in 2012 by 14 points or more. Only one Republican senator, Maine’s Susan Collins, is running in a state Obama won.

Democratic candidates have been able to rally key constituencies, including unmarried women and younger voters, with calls for legislation to overturn the Hobby Lobby Supreme Court ruling, which permitting closely held private companies to opt out of Obamacare’s free contraceptive coverage on religious grounds, Greenberg said.

To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editors responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net Mark McQuillan, Steven Komarow

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