The waiting game continues. Tomorrow is yet another possible D-Day for King v. Burwell, the challenge to Obamacare pushed by conservative activists, with a technicality threatening subsidies for millions of Americans.
The people who could lose their health insurance as a result of a Supreme Court decision this year are predominantly white, Southern, employed and middle-aged, according to an Urban Institute analysis.
Digging a little deeper:
The new Urban study finds that the biggest regional loser from the court case would be the South. More than 60 percent of people who would lose their individual health insurance live there. Among different income groups, the largest reductions would come for those earning between 200 and 400 percent of the federal poverty level — or between about $40,000 and $80,000 for a family of three. Forty-seven percent of the people who would lose insurance have full-time jobs, and 34 percent have part-time jobs. Sixty-one percent are white.
The demographics here are different than the Medicaid expansion debate, and it’s at least possible that will alter the politics. The majority of the folks in danger, it’s worth noting, live in red states and in Congressional districts controlled by Republicans. Here in Arkansas, there are around 50,000 people who be in danger of immediately losing their subsidies if the plaintiffs win. By 2016, the number of people receiving the contested subsidies is projected to leap to around 100,000. In addition to the subsidies, many of those folks are in danger of losing cost-sharing reductions that the King lawsuit would zap, leading to giant spikes in deductibles and out-of-pocket costs. And remember, this ends up impacting everyone who shops for non-group insurance in the state, because premiums would spike if these folks were forced out of the market. The insurance marketplace would be thrown into chaos, and of course the hospitals would be bracing for a massive uptick in uncompensated care.
The political pressure to help these Arkansans — lower-to-middle income people who purchased health insurance plans with certain prices and coverage levels in good faith — will be immense. But the pressure from Tea Party advocacy groups, activists and lawmakers will also be strong: they’ll argue that restoring subsidies to help these Arkansans would be surrender to Obamacare.
The states could resolve the crisis by simply switching to a state-run marketplace instead of a federally run marketplace. Lots of coverage of the King case suggests that it would “gut” or “destroy” or “unravel” the health care law, but that’s really not the case. Even if the plaintiffs win, Obamacare would be in place — there is no constitutional challenge to the law itself here. The challenge is a technical dispute over statutory interpretation that would create a dynamic similar to Medicaid expansion — states would be able to opt in or out to certain coverage provisions of the law that bring in billions of dollars worth of benefits to the state’s citizens and into state’s health care systems. And as with Medicaid expansion, states that opted out of Obamacare’s benefits would still be paying in (via Medicare reimbursement cuts, investment taxes, etc.) — they just wouldn’t be getting anything in return.
Here’s how Ezra Klein at Vox summarized the situation:
Obamacare is here to stay — as even congressional Republicans now realize. And the King v. Burwell case doesn’t threaten the law itself. It threatens Republican states that don’t want to implement the law. Residents in those states will end up paying a huge amount of money to fund a law that delivers no benefits to them and their state — and, in fact, turns their insurance market into a disaster zone.
But everyone understands the politics of Obamacare, especially in the South: many red states feel the need to cut off their noses to spite Obama’s face. The most likely outcome if the plaintiffs win King is that Obamacare will carry on just fine in 30 states or so, while the politics to continue subsidies prove too toxic in deep-red states, which keep paying for the health care law being implemented elsewhere but refuse help for their own citizens. That’s potentially disastrous news for tens of thousands of Arkansans who will be dependent on the legislature to avoid catastrophe.
As many have noted, this would amount to two health care systems — one for dead-red states and one for blue states (and red states open to pragmatic compromise). Klein peaks at what that might look like:
America develops a two-tier health-care system where most states implement Obamacare and have low rates of uninsurance. But some red states hold out for years or even decades, paying the tab for Obamacare but receiving none of the benefits. Eventually, the politics calm and all states participate, because the alternative is just too disastrous to sustain for very long.
Greg Sargent at the Washington Post has much more on this.
p.s. via Talking Points Memo’s Investigative Fund, this is a good read on one of the red states where subsidies could be in trouble, Arizona. It’s the most Republican-leaning parts of the state that turn out to be most dependent on subsidies, reporter Gus Garcia-Roberts notes:
Here in Yavapai County, most everybody you’ll meet is Republican. In 2012, Mitt Romney received nearly two votes here to each of Obama’s. And yet in this rural red county in a very red state, it’s only taken a couple of years for federally-subsidized health care to quietly seep into the hinges of everyday life and governance. The rate of sign-ups for the program in the county has nearly doubled from 2014, when 22 percent of the area’s potential market share chose a plan through the federal exchange, to March 2015, when 43 percent did, according to the Henry J. Kaiser Family Foundation. The latter figure ranks the county sixth among 54 areas in the state in percentage of the potential market share which has signed up, outranking far more liberal areas in Arizona.
This is what Obamacare Country looks like.
Garcia-Roberts also has some choice bits about the scars from Arizona’s Medicaid expansion fight, which might remind some of the inter-GOP squabble over the private option in Arkansas:
“Jesus had Judas,” Maricopa County Republican Committee chairman A.J. LaFaro testified at the time. “Republicans have Governor Brewer.” …
Brewer, whose gubernatorial term expired in January, says she still has “the scars on my back” from clashing with Arizona’s Republican hardliners. “We have some really, really — I don’t even know if they’re right-wing Republicans, they’re libertarians,” she tells me in an interview in a downtown Phoenix law office. “They’re anarchists. And they’re mean!”