By Joanne Kenen
Probably in late June, the Supreme Court will rule in King v. Burwell. The case challenges whether subsidies, in the form of tax credits, can go to people in states using the federal exchange, or only to those in the states running their own health insurance marketplaces. After the state cases and 2012 National Federation of Independent Business case, it is the second case that poses an existential threat to the Affordable Care Act. (The third high-profile legal challenge, Hobby Lobby and other contraception-related cases, wouldn’t unspool the structure of the whole ACA, only that aspect of women’s preventive health.)
A couple of things to remember:
This case isn’t about whether the Affordable Care Act is constitutional. (The 2012 case was.) This is about interpreting the text, and whether the language of the law allows the subsidies in the federal exchange states.
A ruling to strike the subsidies wouldn’t knock the whole law off the books – but it would do huge damage to coverage expansion, costs, and both the individual and employer mandates. Unless the conservative states and/or the GOP Congress are a whole lot more willing to fix the ACA than they’ve been up to now, a King ruling would unravel much of the historic law.
There’s a lot of confusion about why the briefs on both sides are referring to 34 affected states, when 37 are actually using the federal exchange. That’s because Nevada, Oregon and New Mexico actually did undertake state exchanges. Nevada and Oregon ran into such huge tech problems that they switched enrollment to HealthCare.gov this year, and New Mexico never finished creating its exchange, opting for HealthCare.gov earlier. But all three do control a lot of the exchange, enough to legally be considered state exchanges for the purpose of King. They use the federal technology for enrollment, determining eligibility, and subsidies, but they are regulating the plans and doing the consumer outreach.
States, such as Illinois, that are “partners” are still legally considered federal exchange states and would lose subsidies if King prevails. So, while 37 states use HealthCare.gov, Nevada, Oregon and New Mexico are more or less leasing the federal technology. Eventually, that could be an option for other states if King wins, but that’s not as simple as it sounds. That brings it down to 34 states.
There are a whole lot of numbers floating around out there about how many people would be affected if the administration loses. Just about every think tank or consulting firm has run the numbers. Be careful – some studies project how many people would lose subsidies, others estimate how many would become uninsured. Some projections are based on 2014 or 2015 enrollment – but some work from 2016 estimates and assume a certain enrollment trajectory. If you want a fairly conservative number, you can go with Avalere’s estimate that 7.5 million would lose subsidies.
The Washington, D.C., chapter of AHCJ recently co-hosted a panel about the case and heard from Tom Goldstein, an attorney and founder of SCOTUSblog; Christine Eibner, a senior economist at Rand Corp.; and Thomas Miller, a fellow at the American Enterprise Institute. Read what they had to say about the case.
There are many resources looking at the legal arguments and the impact of a ruling for King, so we’re beginning to see a little discussion from conservatives about follow up. This isn’t a comprehensive list, but should be helpful. We’ll update it this spring.
Oral arguments are March 4, and the ruling is most likely in late June.
The case itself
- Here’s the case page from the Supreme Court.
- Here’s the [easier to navigate] SCOTUSblog.com collection of documents, webcasts and commentaries.
Think tank and consultancy resources and issue briefs
- This Kaiser Family Foundation “perspective” looks at the impact on consumers and the insurance market.
- Another Kaiser Family Foundation resource looks at the legal issues.
- A letter from the American Academy of Actuaries on how the premium rate filing for HealthCare.gov this spring might be modified.
- University of Michigan law professor Nicholas Bagley has written several posts on the case for The Incidental Economist; he also co-authored this Perspective in the New England Journal of Medicine which defends the administration’s position.
- Michael Cannon of the CATO institute is one of the main forces behind the lawsuit and he has written about it extensively. From his page at CATO, you can find assorted writings and panel appearances.
- Here’s a piece Cannon wrote for the Health Affairs blog with Jonathan Adler, an attorney who has been pivotal in the King case.
- Tom Miller, in an essay for the Manhattan Institute, traces the history of a case that many backers of the ACA had dismissed as inconsequential.
- Yale law professor Abby Gluck looks at the claims about the law’s language about state vs. federal exchanges, and about the states’ rights.
Overviews
- There’s a lot of good explanatory journalism out there, but here are a handful of stories or commentaries that struck us.
- A big picture of the legal arguments from The New Yorker’s Jeff Toobin.
- The Upshot’s Margot Sanger-Katz gives a video overview and a Q&A .
The plaintiffs and questions about “standing”
- Jennifer Habekorn profiles the lead plaintiff, David King, in Politico.
- Mother Jones’ enterprising reporting looked at the plaintiffs and raised questions about their legal standing, as did this Wall Street Journal piece.
Solutions
Here are some articles about possible solutions. We haven’t seen too many of these yet. Note that most of them lack key details such as how many people would get subsidizes or for how much.
- Michael Leavitt talks about using private exchanges to fill the gap in an interview with Healthinsurance.org
- An essay from an expert at Leavitt Partners outlines possible state ways to move ahead.
- Politico looks at why it’s not so easy for states to create exchanges now – even if they suddenly decided they want to.
- The Washington Post takes its own look at possible state action – and the barriers.
- Three senators say they are working on a transitional solution – but no details yet.
- Here’s HHS Sec. Sylvia Burwell telling the Hill that she doesn’t have a secret plan.
- Sen. Ben Sasse argues in a Wall Street Journal op-ed that a COBRA-like solution could replace the subsidies while Congress comes up with an Obamacare alternative.
Joanne Kenen is AHCJ’s Health Policy topic leader and health editor at Politico. She is leading an effort to provide resources to help AHCJ members cover the complexities of implementing health care reform by writing blog posts, tip sheets, articles and other resources.
