Last week, the Supreme Court heard arguments in the most recent and pernicious attack on the Affordable Care Act – aka Obamacare. In the absence of a dysfunctional Congress, the case would be beneath the dignity of Court: it addresses no complicated legal issues that might guide future decisions of lower courts. Instead, the Supreme Court has been asked to decide whether a drafting error resulting in one unfortunate phrase in the much maligned 2000 page law –“Exchange established by the States” — means that more than 6.3 million citizens would not be eligible for federalsubsidies allowing them to afford commercial (i.e. – non-governmental) health insurance.
Ordinarily, Congress is expected to fix such drafting problems itself. Each year Congress pass dozens of “Technical Corrections” bills to fix such errors in prior legislation. These bills are akin to software patches that are regularly released by companies to fix unanticipated “bugs” previously release programs. But this is no ordinary legislation. Having spent six years vilifying for President Obama and has supporters for passing legislation that improves American lives it is far too late in the day for the Republican Congress to replace demagoguery with common sense.
So this issue is now in the lap of the Supreme Court, with its well-known partisan divide of four liberals, four arch-conservatives, and Justice Kennedy, who as the “swing vote” effectively decides many of the most divisive cases himself. The Court can decide to gloss over this drafting error, as proposed by the Obama Administration, or apply its language to devastating effect. Prior Supreme Court cases—i.e. “precedent” in the jargon of the law—can be found to support either position. In the end, there have been few cases in which the Court has more judicial freedom – assuming precedent ever really binds the Court – to do whatever it wants in keeping with the Justices own political biases.
I hope the Supreme Court allows Obamacare to continue building upon its unquestionable success. Notwithstanding specious rhetoric from Republican politicians like Senator Pat Toomey that Obamacare is “taking away our freedom,” it has freed millions of American from the fear of catastrophic illness without a health care security net. Subsidized exchanges established by states and the federal government have allowed 13.4 million Americans to obtain health insurance and the percentage of uninsured has plummeted from 18 percent to about 13 percent. Meanwhile, Republican alarms that Obamacare would lead to an explosion of health care costs, cataclysmic job loses, and devastating increases in the national debt have all been debunked. When Obamacare was enacted in March 2010, unemployment was at 9.7 percent, the deficit was 8.65 percent of the GDP, and healthcare costs were rising at 3.4 percent annually. In March 2015, unemployment is down to 5.5%, the deficit has dropped to 2.8% of GDP, and the healthcare inflation has dropped to 2.4%–the lowest in fifty years.
Part of me, however, would like to see the Court grant the Republican dream of tearing the roots out of Obamacare so soon after it has begun to bear fruit. What will the Republicans say to the 6.3 million American who would immediately lose access to affordable health care? Would they console them with false promises of lower deficits for their sooner to be heirs? In fact, cutting the subsidies would do nothing further to reduce the deficit but would, like the false promise of the Bush tax cuts, make it far worse. Eliminating the subsidies would have little, if any, effect on taxes. There would be no tax refunds. The only difference would be that funds previously invested in the public’s well-being and spent to pay hospitals, doctors, and other health care providers (among others) would sit in the treasury until someone devised an inevitably less beneficial use for the funds.
Republicans might try the usual tropes about federal entitlements—that government funds encourage people live on the dole rather than seek productive work. But this malevolent meme would ring especially hollow here: 81 percent of the 6.3 million people who would lose coverage work either full or part time, and 82 percent have modest incomes, but are not poor.
Meanwhile, the unlucky states (including my home state of Pennsylvania) would devolve to the costly and self-destructive world of adverse selection in health care markets. Subsidies encourage healthy people to buy insurance. When only sick people would buy insurance, costs skyrocket which, in turn, makes insurance less attractive and even more costly. According to the Urban institute, elimination of subsidies would quickly lead to a 35% increase in insurance premiums and a 69% reduction in health plan enrollment.
It is, of course, possible that the Republican Congress would fix the statutory glitch, if the Supreme Court is unwilling to overlook the error. And hell might also freeze over in the meantime. Far more likely is that Republicans would face the difficult task of justifying their abysmally malevolent inaction during the 2016 Presidential elections—all but assuring Hilary Clinton’s inevitable quest to retain Democratic control of the White House at the end of President Obama’s term.
Gary L. Kaplan teaches health law at Carnegie Mellon University and is a co-founder of the Pittsburgh law firm Kaplan Cook PLLC.