Obamacare Obstructing States Start to Freak at the Consequences

June 1, 2015 8:53 p.m.

Tonight the Wall Street Journal has a fascinating look something we may soon hear a lot more about in a very rushed and chaotic fashion. Last month, an outfit called the Milbank Memorial Fund (as best I can tell a relatively non-ideological foundation focused on health care policy) held a secret one day meeting in Chicago for officials from states who may suddenly find their citizens cut off from Obamacare health care insurance subsidies because of the new GOP challenge to the law.

The verdict. Basically that they’re screwed.

There’s simply no way for states to set up exchanges in time for this year – just at the purest technical level, setting aside whatever politics are involved. And that’s setting aside a lot because Republican controlled state legislatures in particular are staunchly against budging in favor of facilitating the functioning of the law. Governors – even GOP governors – tend to be a bit more pragmatic since they face state-wide electorates and are most likely to bear the brunt of any backlash.

Republican state legislatures seem likely to sit back and let the agony happen. At least for a good long time.

I remember when the subsidy issue was first raised as a longshot challenge to the health care law. At the time, the administration noted a relatively easy workaround: basically a simple signature from a governor would rechristen the federal exchange as a state exchange. Problem solved.

Get TPM in your inbox, twice weekly.
Your subscription could not be saved. Please try again.
Your subscription has been successful.

That angle or various permutations of it are still being discussed …

As a result, a few supporters of the law are eyeing fresh workaround options, that even they aren’t sure will work. One possibility is that an agreement, rather than a contract, could be drafted between a governor and the Obama administration to establish a state’s exchange. Others are looking into whether the Department of Health and Human Services could say states have established their own exchanges already by helping the federal government operate an exchange on a state’s behalf.

“What if HHS declared that any state that performs substantial, ongoing, and essential exchange functions has established an exchange, even if the state never formally elected to do so?” Nick Bagley, a University of Michigan law professor whose opinions are widely sought by supporters of the law, wrote in a recent blog post.

The upshot in all these cases is that it is not clear just what the Supreme Court would say if it broadly ruled against the law – whether it would rule in a way that made workarounds relative simple or extremely complicated. But the big issue is political willingness or flexibility in the states. Republicans running for statewide office in blue and purpled states have already made clear enough that they’re very worried about the consequences of a subsidy cut off. See Wisconsin’s Ron Johnson as a poster boy for that. But Republican state legislators seem quite unlikely to budge. And even if some did, a subsection of them could likely prevent a state from taking the actions that would allow subsidies to continue to flow.

For my own part I still think it is more likely than not that the Court will affirm the law. The inherent silliness of the challenge isn’t the main reason I think that. I think it’s fundamentally a political issue for the Court – not just ideological politics but legacy politics and an effort to avoid Court damaging rulings that would limit its freedom of action on important but less publicized cases. Roberts decided he didn’t want to go down this path three years ago. I don’t see why he would decide differently now. Am I confident on this point? Not at all. But I think this sort of political analysis is the real driver of the story.

If I’m wrong, millions will suffer in the aftermath.

Latest Edblog
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Investigations Desk:
Senior Editor for Content Strategy and Audience Development:
Editor at Large:
General Counsel:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: