Saturday, February 28, 2015

An Irresistible Force May Soon Meet with an Immovable Object

In the biased but accurate words of the Huffington Post:
The House of Representatives voted Friday night to avert a shutdown of the Department of Homeland Security, so they can come back and have the same fight in a week.  The vote was the result of a divide between Republicans in the House and Senate over whether to surrender now or hold out for one more week.
Anyone who actually cares is welcome to tune in next week for further entertainment.  I prefer to pass and move on to far more important matters; what will happen if the Supreme Court rules that Obamacare only grants subsidies to people buying insurance in a state exchange and not a federal exchange.

To recap: Obamacare called on states to set up exchanges to buy insurance an provided that if the states did not set up exchanges, the federal government would set them up instead.  It also provided subsidies to make insurance more affordable.  However, in a little glitch overlooked at the time, it said that subsidies would be available on an "exchange established by the states" and neglected to include exchanges established by the federal government.  No one at the time noticed the glitch, and the IRS made regulations making the subsidies available on federal exchanges as well.  The majority of states then refused to establish exchanges, so federal exchanges went up instead.  Then some libertarian organization discovered this glitch and brought suit to block subsidies in states.  They argued not only that this glitch blocked subsidies in states that used federal exchanges but that Congress intended the law to work that way in order the pressure states into setting up their own exchanges.  The lawsuit is known as King v. Burwell.

There there is little doubt to my mind that if King v. Burwell had reached the Supreme Court before the exchanges were up and running, the majority of states run by Republicans would have supported it.  The advantages would have been obvious.  They could have blocked subsidies for the people of their states, thus preventing them from buying health insurance, but they would still have been required to pay the fine.  This would have helped create pressure to repeal the monstrosity.  But the suit reached the Supreme Court too late.  Now states are facing the prospect of people losing subsidies they already have.  This has led 22 states to file briefs calling for the subsidies to stay in place.  Their main argument is that the Supreme Court has held that any time the federal government makes a benefit conditional on states doing something, it must clearly say so, and there was never the faintest him of such a threat in this case.  Once again, I am confident that if the federal government had made receiving subsidies conditional on the states establishing exchanges, many states would happily have blocked the subsidies by refusing to establish exchanges, but blocking their citizens from receiving a benefit is one thing; taking it away is another.  Seven states (Alabama, Georgia, Indiana, Nebraska, Oklahoma, South Carolina, and West Virginia) are urging the Supreme Court to strip their citizens of subsidies.

So, what happens if the Supreme Court does, in fact, vote that only people who buy their insurance on the state exchanges can receive subsidies?  Well, instantly an estimated 8 million or more people will lose their subsidies.  Most of these people will presumably not be able to afford insurance without them.  All will have incomes above 125% of the poverty line and many will be middle class and sympathetic.  Some of them will have serious medical problems, so that having health insurance will be a matter of life and death to them.  Republicans are beginning to realize that dancing in the street for joy at the prospect is really bad politics.

The immediate Republican response will presumably be twofold (1) blame Obama for "illegally" dispensing subsidies, and (2) argue that this outrage shows why the monstrosity that is Obamacare should be repealed right away.

Response (1) may have emotional resonance, but it will only get the Republicans so far.  In the end, people losing their health insurance will want a way to keep it, not someone to blame for the loss.  It will be particularly unsuccessful if Obama is holding out an easy solution ("just correct the typo") and Republicans are fighting it tooth and claw.  Response (2) may be a good applause line, but needless to say responding to millions losing their health insurance by taking it from millions more will not be widely popular!  The pressure will be on for an actual solution, and fast.

How strong will the pressure be?  Well, when the federal government shut down, undoubtedly serious problems would have resulted if the shutdown had continued, but in the time it lasted, most people suffered nothing worse than not getting to see some monuments.  Refusal to raise the debt ceiling would undoubtedly have had catastrophic consequences, but the threat of them was enough to end the showdown.  And defunding Homeland Security is unlikely to result in anything worse than some employees not getting paid, but Republicans are already preparing to cave.  A "victory" in King v. Burwell would lead millions immediately losing health insurance and the prospect of costs spiraling out of control for those remaining.  The pressure to reach a solution fast will be overwhelming.

But pressure on the other side will be overwhelming as well.  For five years now, Republicans have considered any collaboration with Obamacare as the vilest possible act of treason.  The Tea Party faction will be out in force.  An irresistible force will meet with an immovable object.

A lot of Republicans must secretly be praying that their side will lose its Supreme Court showdown.

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