May 27,2015
From the Desk of Bob McNett….
The Supreme Court of the United States will announce next month their decision on King vs. Burwell, the pending lawsuit that will decide if premium subsidies going to lower to middle income earners on the insurance exchanges are legal.
The Affordable Care Act says that citizens who make less than a specific income, based on number of dependents, are eligible for taxpayer-funded subsidies to help pay for individual health insurance purchased from exchanges. These subsidies began to be handed out in 2014, and continue this year.
The framers of the law specified that these subsidies would flow through exchanges set up by the states and this is what the lawsuit is based on. Only 17 states have some form of health insurance exchange that is totally or partially supported by the state government. The other 33 states opted to let the federal government sponsor the exchange, and as a result do not offer a state-based exchange.
Therefore, the lawsuit against the government argues that only the citizens of the 17 states that offer a state-based exchange are eligible for premium subsidies. The citizens of the other 33 states, by the wording of the law, are not eligible for subsidies.
It is generally agreed that , even though the goals of the law are admirable, the process of writing the ACA law and implementing it was very messy. In their haste to bring the law to a vote in Congress, the framers of the law now admit that the wording that brought about King vs. Burwell was an oversight. We can all remember what happened when the switch was pulled to activate the federal and state exchanges in 2013…..possibly the ugliest government-sponsored snafu in history as the entire system melted down.
The question now is….will the Supreme Court decide that the real intent of the law supercedes the actual wording of the law? Or will the Court decide that the letter of the law must be followed?
If the Supreme Court rules against the government, there is currently no back-up plan from the President or Congress as to how to deal with this. The Urban Institute predicts that, if the Court rules against the government, that some 8.2 million people will lose insurance because they won’t be able to pay for it without a subsidy. Plus, the Institute predicts that premiums for exchange-based insurance will soar by 35%.
The Republicans realize that if all this happens they will likely be the ones that will be blamed by the public, since the party has taken an extreme anti-Obamacare stance from the very beginning of considering this law. Therefore, the party leaders have floated several plans that deal with this happenstance, even though no one plan has attracted majority support. The Obama administration has offered no back-up plan suggestions, and have stated publicly that they believe the Court will rule in their favor.
My humble opinion is that the government will win it’s case. My thinking is based on the last major Supreme Court decision affecting Obamacare, where the court ruled in favor of the government a couple of years ago in deciding that the individual mandate, requiring all citizens to buy health insurance or pay a penalty, was constitional. Chief Justice Roberts, typically seen as leaning conservative, practically had to do somersaults to find a reason to deem the provision legal. He said that the only way the mandate could be found to be constitional would be to call it a tax, since Congress had the power to tax. He used this argument even though the government, in it’s arguments before the court, had denied that the mandate represented a tax. So, it seems to me that if Chief Justice Roberts chose to go through the back door on the prior decision, he will likely find a way to rule in favor of the government on this case. Informed speculation is that Roberts, stung in the past by criticisms of his court, does not want his tenure as Chief Justice to be remembered as the Court that killed Obamacare.
However, my opinion and a five dollar bill will feed your family from McDonald’s Dollar Menu. And hold the opinion.
What will happen? The decision has already been made, but these decisions are held in extreme confidence until the end of the Court’s session, which usually ends in late June or early July. We’ll know soon!
Bob McNett The McNett Agency
918 294 3712 1 866 497 7119 toll free 918 494 6725 fax