Will Gov. Scott Walker take health insurance away from Wisconsinites?
The decision by the U.S. Supreme Court to
hear an Obamacare subsidies case this session puts about
4.7 million people in jeopardy of losing their new health insurance. By the end of open enrollment for 2015, it could be as many as 9.7 million. These are people who purchased their Obamacare insurance on the federal health insurance exchange because their states—36 of them in all—either refused to or failed to set up their own exchange. The lawsuit the SCOTUS will hear says that the text of the law prevents all those people from getting tax credits, a drafting error that would be easily fixed if Republicans cared about people being insured. Never mind that there's ample Supreme Court precedent to toss the case, the very fact that they intend to hear it bodes poorly for the law.
There's a way, though, that the primarily Republican governors and legislatures in those 36 states could protect their citizens by setting up their own exchanges. The federal grants to do so unfortunately run out this Friday, November 14. But there's a relatively simple work-around even so.
States could still set up their own exchanges after Friday—as long as they do it with their own money, not federal funds. That could get expensive. But Nicholas Bagley, a professor at the University of Michigan law school, explains that there's a relatively cheap workaround:
A state could…establish an exchange and appoint a state-incorporated entity to oversee and manage it. That state-incorporated entity could then contract with Healthcare.gov to operate the exchange. On the ground, nothing would change. But tax credits would be available where they weren't before.
This idea—a state exchange in name only—is clever, and it would take less time and money than a state setting up its own exchange. (It's also eminently achievable: Oregon and Nevada already operate state exchanges that use federal technology.) But Bagley's plan still requires a state to want to save its residents' Obamacare subsidies.
That's the rub. Republican lawmakers in most of these states have already demonstrated how little they care about the well-being of their constituents by refusing to expand Medicaid under the law. Their deep and irrational hatred of it trumps concern for their citizenry.
But there are a few key political differences between this issue and Medicaid expansion. A big part of it is the population being served; it's relatively easy for them to overlook the poor people who are kept out of Medicaid. These people don't have any political clout, and as last Tuesday demonstrated they don't vote. But the people losing insurance are much more likely to protest, loudly and effectively. The fact that they would be losing insurance—that politicians and the court would be taking away something that they have in value—is pretty huge. It's a lot harder to take something away from someone than to refuse it in the first place.
There's potentially a couple of big, well-heeled allies for the newly insured in all this, as well. The insurance companies have gained millions of new, paying customers that would vanish if the subsidies dry up. Many have reengineered their whole structures to comply with the law and to bring these new customers on board. They're not likely to be happy to see it blow away with a bad Supreme Court ruling. Additionally, hospitals in these states have benefitted by having a larger base of insured—read "paying"—patients.
None of which means these Republicans will do the right thing. They've demonstrated that Obamacare is the hill they are willing to die on numerous times before. But refusing to act and thereby stripping insurance away from millions is a dicier bet.