Been Thinking This All Day


From TPM Reader HW …

I think the Halbig decision is terrible: terrible for the insured, terrible for American law (to your point about the corruption of judges who ignore established tenets of construction to reach their predictably preferred political outcome).

But it is also terrible for one group with whom I have no sympathy: Republican governors and state legislators.

Here is where this leaves them, even before the issue is ultimately resolved at the Supreme Court: will they build a state health insurance exchange or allow the taxes of a large number of their citizens to go up (remember these are tax credits their middle class citizens are losing, not Medicaid benefits their poorest citizens are not getting in the first place). If you are Rick Scott (FL), Scott Walker (WI), John Kasich (OH), Rick Snyder (MI), or Tom Corbett (PA), all facing competitive races and important races for the long term balance in the House of Representatives, you are faced with a lose-lose proposition. If you say, “still no exchange,” you are basically forcing a large tax increase on health care- that strikes me as a pretty good issue for their Democratic opponents to run on in the fall. If you say, “ok, we’ll build an exchange,” you are alienating your base going into the fall- and, of course, this problem goes away for Americans in these states.

I hope Democratic operatives in these states are smart enough to test this issue and frame it right away, I think its salient as of today. The unintended consequence here for Republicans could be profound- but it will be critical to put these guys on the spot.

To a degree I think we may understate the willingness of Republican governors and especially state legislators to simply say, “Who cares?” Or to say, “Well, all this chaos just shows Obamacare is a disaster.” But in swing states – and there are a slew of them – I think this may be dicier than people realize, as HW suggests.

There are roughly 4.7 million people who this potentially affects. That’s a lot of people. And the tax increases they face are quite large.

Remember, for these purposes, it doesn’t matter whether they were insured before. Under this system, they get tax credits under Obamacare. We should also note that these are not generally people with low or very low incomes, people who, unfortunately, campaign politics often ignores. Those people got enrolled under Medicaid. The people affected here are generally middle and lower-middle income people.

Note in this map that Florida is in the group of states where policy holders would face a tax increase equaling to almost 100% increase in their premiums. Wisconsin, Michigan and Pennsylvania are in the 70% to 75% range. These are major tax increases.

The danger here for Democrats is that since they are by nature more focused on the procedural nature of policy outcomes, they tend to think less about the political dynamics in which all public programs exist. More specifically, they tend to neglect the permanent and intrinsic connection between the two. The reining assumption is: get the policy right and the politics will follow.

Only it doesn’t.

Since Republicans are not the party of government, they’re less focused on the public policy mechanics and thus more attuned to political and electoral possibilities.

The reality is that good public policy is never divorced from politics – either in the advantages gained from it or the necessity of defending and sustaining it in the public arena. While they work this case in the Courts (where I suspect they’ll eventually win) Democrats should move rapidly aggressively to pursue it in the 2014 campaign. The fate of the whole law may be at stake.