With the Supreme Court decision looming, the right is rethinking its scorched-Earth approach to attacking Obamacare.
Last summer, two Republican-appointed federal judges ruled, against the furious dissent of the Democratic appointee, in favor of what had theretofore been viewed as an outlandish lawsuit designed to blow up Obamacare. The unexpected progress of the lawsuit, hatched by anti-Obamacare activists at a right-wing think tank, filled conservatives with sudden Schadenfreude. They had lost every previous opportunity to finish off universal health care: a 2009 vote in the House, a 2009 vote in the Senate, another 2010 House vote, and, in 2012, both a lawsuit and a presidential election. Now they had yet another chance to drive a stake through the hated centerpiece of Barack Obama’s domestic legacy.
Next month, the Supreme Court will rule on King v. Burwell. If all five Republican appointees support the plaintiffs (there’s no chance any of the Democrat-appointed justices will take the lawsuit seriously), some 7 million Americans will quickly lose their insurance. The prospect that this will occur has induced a wave of panic — not among the customers at risk of losing their insurance, who seem largely unaware, nor even among Obamacare’s Democratic supporters, but among Republicans. The chaos their lawsuit would unleash might blow back in a way few Republicans had considered until recently, and now, on the eve of a possible triumph, they find themselves scrambling to contain the damage. It is dawning on the Grand Old Party that snatching health insurance away from millions of helpless victims is not quite as rewarding as expected.
Unlike the Obamacare lawsuit that failed three years ago, the latest case is not based on a radical legal theory. Instead it is based on a novel reading of legislative history. The law allows states to set up their own exchanges to sell insurance to those who don’t have it through employer coverage, Medicare, or Medicaid. If states don’t establish an exchange, the federal government sets one up for them and, as it does with the state exchanges, offers customers tax credits. The trouble is that the law authorizing tax credits defines the exchange as “established by the state.” This ambiguity — does “by the state” not also mean the federal government? — was a technical omission. Many other parts of the law indicate its intent to make tax credits available to customers on the federal and the state exchanges alike.
The plaintiffs are led by a Vietnam veteran in Virginia named David King who makes $39,000 a year and objects to having to purchase insurance on a federal exchange. He would be exempt from this requirement were he not eligible for the tax credit — his $275 monthly payment would rise to a disqualifyingly unaffordable $648 — and this exemption, his lawyers argue, was exactly Congress’s intent. Without tax credits, the insurance would be unaffordable to most customers, triggering an actuarial death spiral that would destroy the individual insurance market in any state that attempted it. The plaintiffs insist Congress created the threat of self-destructing federal exchanges to coerce states into creating their own. (Disregard the copious evidence that the law’s drafters, and officials at the state level in both parties, believed federal exchanges would include tax credits.)
The lawsuit works more on the level of an elaborate prank than as a serious reading of the law. And yet it stands at least some chance of success — it only needs to persuade Republican-appointed judges. That prospect has grown suddenly unnerving because, unlike previous Republican efforts to strangle the law, the current one comes as Obamacare is functioning extremely well. Premiums on the exchanges have come in well under projected costs, customers report higher satisfaction with their coverage than those who have employer-sponsored insurance, and overall medical costs have grown far below the projected rate. It is one thing to take away a scheduled future subsidy, of which most intended beneficiaries are unaware. It is quite another to take away a benefit they’re already using.
Should the court side with King, wiping out tax credits for residents of the 34 states with federally run insurance exchanges, Obama will propose a simple alternative: Congress should pass a law correcting the drafting error that sparked the lawsuit. Problem solved.
From the standpoint of Republicans in Congress, of course, this would represent the opposite of a solution. The party remains doctrinally committed to the complete destruction of Obamacare. In the past, conservatives have rejected even partial changes to the law on the grounds that anything making Obamacare less onerous amounts to collaboration. This doctrine will now put Republicans in the position of endangering the lives of sick Americans who will lose access to their medical treatment.
Senator Ron Johnson of Wisconsin appeared on a conservative talk-radio show last month to raise awareness of the party’s dilemma. Obama, he told host Jay Weber, will unleash a public-relations campaign to highlight the Republicans’ cruelty. “And of course, he’ll have the ads all racked up with the individuals that have benefited from Obamacare on the backs of the American taxpayer,” he said. “He’ll have all those examples as well, so — ”
“And the sad-sack stories about who’s dying from what and why they can’t get their coverage,” interjected Weber.
“Right,” agreed Johnson.
Senator Ben Sasse of Nebraska has likewise warned that a successful lawsuit would create problems. “Chemotherapy turned off for perhaps 12,000 people, dialysis going dark for 10,000. The horror stories will be real,” he wrote in a Wall Street Journal op-ed. For decades, medical deprivation of this sort used to be a uniquely American fact of life, at least among industrialized countries. Obamacare has turned it into something different: an actual political problem for opponents of universal health insurance.
Neither Johnson nor Sasse has a real plan designed to stop those horrors from taking place. Instead, their aim is to give Republicans a way to divert the blame onto Obama. The party is circulating contingency plans to temporarily restore the tax credits in exchange for crippling the law in other ways. Phil Gramm, the former Republican senator turned conservative-think-tank “visiting scholar” and financial-industry lobbyist, has proposed that Republicans pass a bill to temporarily extend the credits in return for eliminating the law’s regulations prohibiting insurance companies from rejecting old or sick customers. Competing proposals by Johnson and Sasse would likewise weaken Obamacare’s insurance regulations, ultimately destroying the law’s functionality. Gramm evenacknowledges that his plan “would put Obamacare on the path to extinction.” Obviously, Obama is not going to sign a bill that puts Obamacare on the path to extinction. The purpose is simply to give Republicans a talking point — they can say they passed a bill and blame Obama for vetoing it. But odds are that Republicans will fail to unify around a bill that can pass both houses of Congress with only Republican votes, because some will deem even a bill that causes Obamacare’s eventual demise unacceptably conciliatory.
At that point, it will fall to the states to either establish their own exchanges or watch their individual-insurance markets collapse. Neither option is terribly attractive for Republicans. The former means surrender. Doing nothing means sowing chaos, deprivation, and death. Will Republicans let this happen? Many Republican-led states have already declined to participate in the law’s expansion of Medicaid. But conservatives are always enthusiastic about cutting programs that aid the vulnerable. They have historically been more reluctant to cut middle-class programs like Social Security and Medicare. Plus the exchange plans not only have buyers; they also have sellers: insurance companies. Even some Republicans eager to throw middle-class people off their insurance may blanch at the prospect of inflicting pain on the insurance industry.
Fear of change has been the right’s most powerful weapon in the health-care wars since they began under Harry Truman. Seeing their weapon turned against them is a frightening sensation, one they are likely to experience many times again.