The Next Step If Obamacare Loses in Court
What if the Supreme Court rules against the government in King v. Burwell, and the Obamacare subsidies end in states that have chosen not to set up health-care exchanges? Opinion is split on what comes next -- both on what happens to people who have federal subsidies in those places and on what the political fallout will be.
Even political scientists strongly disagree. Patrick Egan at the Monkey Cage believes the political part would mainly be a problem for Republicans. Scott Lemieux, writing at The Week, disagrees, noting that “presidents generally get both more credit and more blame for what happens under their watch than is justified by their power.” This is particularly true of the Affordable Care Act, which is known as Obamacare even though, as Lemieux notes, it was “a statute that required immense congressional skill on the part of Democrats to pass.”
But the real question about King (if the challengers win) isn’t about which party gets the blame for chaos in Republican-state insurance markets. It’s whether important groups in those states pressure their politicians to do something about it. 1
If sufficient pressure is applied, the likely outcome is that subsidies are restored, full stop. 2 This would probably take the form of a two-year full extension, with Republicans claiming they will have an Obamacare replacement ready at the end of that period. But since the prospect of such an alternative plan is highly unlikely, the extensions are likely to be renewed until Democrats have the votes to make them permanent.
This is because restoring the subsidies is legislatively easy, and anything else is difficult. Republicans would have trouble agreeing on an alternative even if they didn’t need Barack Obama’s signature. Since they do, the simple legislative fix is the only viable option if they want to solve the problem.
I have no idea if the public and business groups would apply that pressure. The millions of people directly affected -- most of them represented by Republicans in Congress and at the state level -- will notice what happened. If the individual insurance markets collapse in those states, even affluent folks will be affected, as their costs suddenly spiral upward along with everyone else’s. Will they demand that Something Must Be Done? Will hospitals, doctors, insurers and others in the health-care industry make that pitch, too? Or will most of them just take the hit and move on?
All in all, if the King plaintiffs win in the Supreme Court, don’t pay attention to Democratic or Republican spin. The whole ballgame will be whether people whom Republican politicians care about demand action if subsidies dry up.
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Restoring subsidies would be possible at the national or the state level. So pressure on Republicans in Congress or in state governments could be effective. Even pressure on local Republicans might be effective, since it would turn them into lobbyists for bringing back the subsidies.
I can imagine some window dressing. Republicans in Congress might add language to a bill restoring subsidies about how much they hate the ACA and how Barack Obama is responsible for every penny of health-insurance inflation since 2010. And force him to sign it if he wants to fix the King decision. Republicans might also add on something substantive (perhaps the medical-device tax repeal) that they have the votes to pass separately.
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