Why a Federal Court Just Ruled Obamacare Subsidies Are Illegal in 36 States
Adrianna McIntyre, Vox: Why a Federal Court Just Ruled Obamacare Subsidies Are Illegal in 36 States - Vox
The success of the Affordable Care Act hinges crucially on the subsidies. The primary purpose of the law was to extend affordable health coverage to millions of Americans; the two main ways the law achieves this is through the Medicaid expansion and through subsidized coverage on the insurance exchanges.
Without subsidies, private insurance become unaffordable for many people who have already enrolled. The judicial process is still playing out, but according to recent analysis from the Robert Wood Johnson Foundation, this decision could affect over 7.3 million people expected to receive federal subsidies in 2016.
If the plaintiffs prevail and subsidies are withdrawn, healthy people would drop their coverage, and only the people who are very sick — and therefore very expensive to insure — would keep their plans.
This sets up the classic insurance “death spiral”. By putting coverage out of financial reach for so many people, it would undermine the entire purpose of the Affordable Care Act.
…
“No sentient being following the health care debate could argue, in good faith, that Obamacare’s architects intended for the federal government to set up exchanges without subsidies,” wrote Jonathan Cohn in 2012. “It would completely subvert the law’s intent.”
The government will ask for en banc review of the 2-1 decision, and likely get it reversed since a heavy majority of the D.C. Circuit judges are Democrats. But then it will go to SCOTUS. If they accept it for review, it will be because Scalia, Alito, Thomas and Kennedy loathe Obamacare and want to kill it. It would then be up to Roberts to interpret the law correctly and save it again, or this time join his fellow conservatives to let it die. Ironically, killing Obamacare, devoutly wished for by conservatives, could unleash a massive anti-GOP backlash, as millions of Americans watch the decision cause their premiums to soar to the point they lose their newly acquired coverage. It might even force a bunch of red states to launch their own exchanges to keep the subsidies so many of their citizens will have come to depend on.