Tuesday :: Jul 22, 2014

Hello Public Option?

by Deacon Blues

Image courtesy of Talking Points Memo

Those of us who track and know something about health care policy have been tracking the Halbig v. Burwell case for months, knowing that it (and not the Hobby Lobby case) represented the biggest legal threat to Obamacare's long-term viability. Those chickens came home to roost this morning when a three-judge panel of the DC Court of Appeals (DCA) ruled 2-1 to eliminate the federal subsidies for individual insurance purchased in states with federally-run health benefit exchanges. The DCA's reasoning was that the law passed by Congress provided subsidies for only those buying insurance "through an exchange established by the state." However, as we know, many GOP-led states opted out of main parts of Obamacare, whether it be the Medicaid expansion or the requirement to set up a state-run exchange, and instead intentionally dumped their responsibility for setting up exchanges onto the federal government.

And if you think this was all coincidence and not part of a legal strategy to undermine the law when these GOP governors opted out, then I have real estate I'd like you to buy.

The Obama administration will now ask for the full DCA to review the ruling, and with more Obama-appointed judges on the full panel, it's possible that the full DCA would reverse this three-judge ruling on the basis of what they divine was congressional intent. However, as Jonathan Turley and others have noted, the full DCA might adhere to recent Supreme Court (SCOTUS) rulings and instead uphold today's ruling. The administration's supporters assert that Congress clearly intended for people to have access to affordable health care without distinction as to whether it was provided by a state-run or federally-run exchange, and believe if the case gets to the SCOTUS and is merged with other similar cases from other districts that are working their way through the system, the top court will rule accordingly as to congressional intent.

And again, the Obama administration is delusionally wrong. The same conservative majority that eviscerated the Voting Rights Act and decided that congressional intent didn't matter will have no hesitation in ignoring any alleged congressional intent argument and instead hold the case as to what is written in statute to undermine the law. Which means that the only way to fix this without millions of policyholders in red states seeing their premiums shoot up down the road when the SCOTUS kills the subsidies would be for Congress to fix this legislatively before it gets to the SCOTUS. And we all know this Congress will not do anything to fix it while this president is in office.

Yes, this only affects exchange participants in red states with federally-run exchanges, who face the prospect of losing their subsidies; it does not affect those who bought insurance in state-run exchanges. And yes, nothing will happen until a legislative fix occurs or until SCOTUS tackles this issue, which may not be in the next term. That means months of uncertainty, not only among those red-state enrollees but just as importantly within the insurance industry, which was salivating at millions of new federally-subsidized customers and had baked those revenue streams into their future financial projections. That's where this will get interesting, because although the GOP won't give a damn about millions of everyday Americans giving up insurance coverage over steep premium increases, it remains to be seen how the Wall Street wing of the GOP reacts to the pressure from the insurance industry while the Tea Party wing demands the final nail in the coffin for Obamacare.

As for progressives, I wonder how things would be different this morning if Ben Nelson and the White House hadn't tossed aside the public option?

Deacon Blues :: 9:53 AM :: Comments (1) :: TrackBack (0) :: Digg It!