Republicans and an Obamacare Apocalypse
If you liked the fiasco in the House of Representatives late Friday -- as its leaders scrambled to avoid a shutdown of the Department of Homeland Security -- Republicans are setting things up for an even bigger imbroglio. This time, health care is on the line.
The Supreme Court will hold oral arguments this week on the big Obamacare case of the term, King v. Burwell. At stake: the potential collapse of the individual-insurance market in states using the federal system (Healthcare.gov) instead of setting up their own exchanges.
Megan McArdle of Bloomberg View explains some of what a King victory would mean. Policy holders receiving subsidies would suddenly find their insurance unaffordable; even those with high incomes might find their costs doubling or more, or possibly have their policies canceled. On the business side, it would likely be a disaster for insurers, hospitals, doctors and others.
Yes, an incredibly easy fix is available. Congress could pass -- and Democrats would demand -- a simple one-page bill making the entire problem go away.
Of course, Republicans wouldn't want to do that because the whole point of the lawsuit was to undermine the Affordable Care Act. But as Byron York at the Washington Examiner said, without some plan they’ll be the proverbial dog who caught the car. That’s why three Republican senators claim to have worked out a plan for putting things right in case the King plaintiffs win.
Unfortunately, as Ezra Klein points out, the “plan” is mostly platitudes, and at any rate most Republicans will oppose any efforts to fix, rather than repeal, Obamacare (see also Vox’s Sarah Kliff on how the DHS mess suggests the problems Republicans will have).
So if the King plaintiffs win and people lose their health care, is chaos the certain result?
Republicans will have three realistic options. They can do nothing. That’s probably what they will do, but it isn't risk free. A lot of Republican voters and Republican-aligned interest groups will be taking a big hit and asking their politicians for help, even if they believe it is all the Democrats’ fault.
The Republicans' most sensible option would be to use the situation to negotiate for modifications in the law. Yet this is the least likely outcome, for reasons Kliff and Klein explain. If Republicans had wanted to cut a deal, they would have done so long ago, and they won't change their minds just because they might be able to get a slightly better deal.
The third option? Though the plan offered by Senators Orrin Hatch, Lamar Alexander and John Barrasso is mostly platitudes, what matters is their pledge to “provide financial assistance to help Americans keep the coverage they picked for a transitional period.”
Now, they don’t speak for other Republicans, especially not (as Klein points out) those in the House. Still, it isn't difficult to imagine a lot of Republicans, especially senators in swing states, wanting to install a temporary fix until (supposedly) the final details are worked out on that Republican replacement plan that’s always, but not quite, ready to roll out. And they might sell it to Obamacare-hating colleagues by pointing out that a repeal has no chance of beating a veto now, so they might as well wait until 2017.
The model might be the Arkansas “private option” Medicaid extension. The Republican governor and legislature wouldn’t admit to supporting Medicaid expansion there, but they allowed it to continue for two more years while they (supposedly) work out a new system.
Given how a "temporary" two-year delay would be so simple it might not be easy for House Republicans to walk away from this third option. But if some of them do opt for a fix, expect a fight among Republicans far more bitter than the current one over Homeland Security funding and immigration.
The specifics: Republicans claim that the Affordable Care Act only allows subsidies if a state has set up its own exchange, and that this help should not be available for people in states using the federal exchange. If this is what the Supreme Court finds, Congress could simply add the words "or the federal government" at the appropriate place in the statute, as Charles Gaba suggests. Note that the Obama administration and most experts in statutory interpretation say the original law allows for subsidies on the federal exchange. For the background on the lawsuit, see Sarah Kliff here and Jeffrey Toobin here.
Warning: Some of those arguments on both sides may be spin intended to influence the court. Republicans have an incentive to argue that a ruling for King would be no big deal, while Democrats want the justices to believe such a decision would be disruptive, especially given a Congress too dysfunctional to act.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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