The Supreme Court is set to hear another case, King v. Burwell, with important implications for Obamacare. The question is whether the IRS overstepped its authority in treating the federal exchanges like state exchanges and causing subsidies to flow — and the companion penalties and mandates to apply — to consumers, governments, and organizations in federal-exchange states, despite the clear text of the law.
In advance of the March 4th hearing, the Administration and allied organizations are painting a picture of calamity – they say six, then seven, now eight million people will lose their subsidies and thus risk losing their insurance coverage if the plaintiffs win.
The clear hope is to frighten the Justices away from reading the plain language of the law, undoing the IRS administrative fiat, and restoring the law as explicitly written and intended.
But reality is otherwise, and the canard of millions going without insurance is not how this will play out. New data show the public strongly supports both enforcing the law as it was originally written and then helping those who lose their subsidies, and hence potentially their unaffordable policies, as a result.
WPA Research, on behalf of Independent Women’s Voice, just conducted a survey of 1,000 likely voters in all the potentially affected federal-exchange states plus Nevada and Colorado. The results clearly show political pressures will preclude the predicted catastrophe, and public sympathy will be with a decision for the plaintiffs.
Current knowledge of the case is extremely low: 61 percent have heard little or nothing about it, while only 12 percent said they have heard a lot, and 27 percent have encountered “just some”.
Then people were read a brief description of the case and its consequences; for example, they explained that if the Court holds for the plaintiffs, individuals, state and local governments, and businesses and organizations alike would be spared mandates and fines. But six million people would lose their subsidies and many would lose their health insurance. Given these choices, 46 percent sided with the plaintiffs, 31 percent with the government, while 23 percent were unsure.
That trend continued: the more people learned, the more strongly they felt the plaintiffs were right. We explained the government’s contention that the case simply involved a technical error in drafting the law. And we explained aspects of the plaintiffs’ case: the history of the IRS writing a new rule after too few states had decided to create their own exchanges, and that 50 million people now face mandates and penalties because of the IRS’s rule. Given these arguments, support for the plaintiffs rose to 59 percent, support for the government fell to 25 percent, and only 16 percent of respondents were unsure.
This high level of support for the plaintiffs doesn’t mean voters were indifferent to helping those who lose their subsidies, however. Asked point blank, 75 percent think it is important “to do something to restore the subsidies to the 6 million people on Obamacare who will lose their coverage if the plaintiffs win the lawsuit.” Fifty four percent say that help is very important, with only 20 percent saying it isn’t important. (Perhaps that 20 percent are remembering the even larger number of people losing the policies they liked back starting in the fall of 2013, a number the Administration dismissed as trivial and “just a percentage”.)
Now you don’t get to 75 percent of voters wanting something done without it being bipartisan; indeed 62 percent of Republicans and 71 percent of Independents want to see assistance provided to those six million people.
And that’s before reminding people that many of those individuals losing insurance will be children, single mothers, the working poor, and people with serious illnesses. Tell them that, and support for targeted assistance rises to 80 percent. And it holds even if you remind them that these are individuals who make too much money to qualify for Medicaid.
So nobody need fear: Congress, the Senate, Governors and state legislatures will all be keen to implement solutions, and those people will not be left without assistance.
In case you are wondering if the Court should save everyone the bother by finding for the government, the answer would be no. While nearly all solutions, like tax credits or state action, are well received by voters, the one solution they rejected was to simply decree that the IRS was correct in interpreting the law as it did, imposing the subsidies and with them the mandates and penalties on those federal-exchange states. It was the only approach where there was more opposition (44 percent) than support (31 percent).
What about those rigid ideologues who hate Obamacare and don’t want to restore what they say are illegal subsidies? Won’t these people demand full repeal again and block attempts to provide assistance?
They may try. But the already-significant political pressure will become even more intense as the left ramps up its media parade of heart-rending stories of people who lose their subsidies and insurance. If a viable targeted legislative solution is blocked, the default outcome won’t be “no assistance” for these six million people but “restoring the subsidies”. That’s because states will be under tremendous pressure to create state exchanges to gain the federal subsidies, but with those exchanges and their subsidies will come the contingent mandates and penalties the Court will have just largely rendered moot.
Obamacare opponents know that outcome would entrench Obamacare and sacrifice all the gains of a good decision in King. They also know voters who do not like the Affordable Care Act are tired of symbolism and want to see real gains, such as the removal of mandates, freedom of choice in insurance, and more options for more affordable coverage.
So here’s the reality activists and politicians will face: If the Court rules for the government, or if states create their own exchanges, those subsidies will continue to be paid to the insurance companies. If the Court rules for the plaintiffs, the public will demand some kind of transition plan to help those people currently receiving federal-exchange subsidies – e.g. refundable tax credits, allocations to the states, state deregulation, or insurance company guarantees of continued policy coverage and fixed premiums.
Either way, a certain sum of money will be needed to help those individuals pay for their policies.
The difference is that if the Court sides with the government, the mandates and penalties will stay firmly in place, and more people will be at risk for losing their jobs and insurance policies as the employer mandate kicks in.
With a holding for the plaintiffs, however, the mandates and penalties will likely disappear along with the harm they cause, and any solution may include additional flexibility for states to undo some of the provisions of the law that drive up costs and limit choices.
(Remember – the vast majority of those who are now on the exchanges and receiving subsidies used to have much less expensive policies that most liked and could afford; undoing the expensive ObamaCare mandates and rules could make affordable insurance possible again.)
For most conservatives, paying for transition assistance will be well worth both the gains that will be secured as well as the harms that will be prevented were ObamaCare to be reimposed via state exchanges or otherwise.
So come March 4th the Justices should disregard the conjectured distress. The data show the American people, including Republicans and Independents, not only want a holding for the plaintiffs, but will demand that Congress provide transitional assistance for those who lose subsidies. Let us hope the Court allows the American people to get their wish.
Ms. Heather Higgins is president and CEO of Independent Women's Voice. Ms. Hadley Heath Manning is is director of health policy at IWF.