The potential damage from a Supreme Court ruling overturning insurance subsidies for low- and middle-income Americans in three dozen states has been thoroughly outlined--the loss of subsides by nearly 8 million people and the cratering of the insurance markets in those states--but figures just released by government healthcare officials put the consequences in even starker terms.
To make a long story short, the worst damage will occur in states whose political leaders are in the forefront of the legal challenge to the Affordable Care Act. These include Florida, Texas, Oklahoma, Alabama, Georgia and South Carolina. In those states alone, 3.5 million are at risk of losing their federal subsidies, and consequently their health coverage, if the court rules against the ACA.
To recap briefly, in King v. Burwell, the court is addressing a challenge to the ACA mounted by a Koch-funded conservative organization. The challengers say that a provision of the 2010 law makes insurance subsidies available only to residents of states that established their own exchanges to sell individual health insurance policies. The senators and congressmen who enacted the law say that's absurd, and subsidies are aimed at residents of those states and the three dozen states that failed to set up their own exchanges and let the federal government do it for them. The law says that residents of all states are eligible for the subsidies if their income is less than 400% of the federal poverty limit, or $97,000 for a family of four.
The court heard oral arguments on the case on March 4 and is expected to issue its decision early this summer.
As Jason Millman of the Washington Post observes, the latest government figures underscore that a decision in the challengers' favor would cause the most carnage in the South, where politicians' resistance to the ACA has been the most intense. It's also worth taking a deeper dive into what these political leaders have done to promote the King lawsuit, against their own constituents' best interests.
Start with a friend-of-the-Court brief filed Dec. 29 by the attorneys general of Oklahoma, Alabama, Georgia, Nebraska, South Carolina and West Virginia, backing the challengers. As Millman shows in a convenient map, in those states the federal subsidies reduce the insurance premiums of eligible residents by an average of at least 65%, and in Georgia and South Carolina by more than 75%. In all those states but Oklahoma, moreover, more than 84% of buyers of individual policies are eligible for the subsidies; in Oklahoma the figure is 81%, but it's 89% in Alabama and 90% in Georgia. (A counter-brief was filed by California, 21 other states and the District of Columbia, advising the court that the subsidies were legal everywhere.)
One might expect political leaders in those states to move heaven and earth to preserve those benefits, but no. The brief filed by the attorneys general urges the court to overturn them in their states. Their reasoning is tortured, to say the least: They say that the payment of a subsidy to even a single employee of a business triggers the employer mandate in a state, "placing such States at a competitive disadvantage in employment." (The mandate requires all but the smallest employers of full-time workers to provide health coverage or pay a penalty.)
Of course, all that one can really say about the employer mandate is that it places all states at a competitive equilibrium, since the ACA by design aims to impose the employer mandate everywhere. These states are trying something different--preserving what they think is a competitive advantage by hosting businesses that don't care enough about their workers to provide them with healthcare.
Interestingly, in Oklahoma--whose Atty. Gen. Scott Pruitt spearheaded the multi-state brief--Gov. Mary Fallin has started to sweat about the consequences of her constituents' loss of federal subsidies. She should, since more than 100,000 Oklahomans are currently receiving the assistance, which reduces their average premiums from $295 a month to $89.
Fallin wrote in an op-ed this week that she's still opposed to the ACA, but urged Congress to enact "targeted-temporary relief for people to maintain their current coverage while we work together on free-market, consumer-friendly solutions" if the court rules against the subsidies. She might do better to introduce herself to her own state's attorney general and ask him why he thought it would be a good idea to take some $252 million a year out of the hands of his state's residents.
Some red states with the largest number of subsidy recipients at risk, including Florida and Texas, stayed off the Oklahoma brief. But that doesn't mean their political leaders were silent. Sens. John Cornyn and Ted Cruz of Texas, and Marco Rubio of Florida, all Republicans, offered a friend-of-the-court brief in September, when the court was pondering whether to take King v. Burwell under advisement. (The brief was also signed by Sens. Orrin Hatch, R-Utah, and Rob Portman, R-Ohio, and Reps. Darrell Issa, R-Vista, and Dave Camp, R-Mich., but now retired.)
They urged the court to take the case and overturn the subsidies, on the apparent grounds that the financial assistance helped too many of their constituents. They cited estimates by the Congressional Budget Office that by 2024 some 25 million people would be receiving health coverage via the state and federal exchanges, three-quarters of whom would be eligible for subsidies.
"The cost of these subsidies is expected to be steep," they observed, without specifying: steep for whom, and compared with what? For a family able to buy affordable health insurance for the first time, the cost is the opposite of "steep," and the cost of the alternative--no health coverage--is incalculable.
Residents in Florida and Texas stand to be the big losers if the court overturns subsidies in federal-exchange states. An estimated 1.5 million Floridians receive the subsidies, which reduce their average monthly premiums from $376 to $82; for a total flowing into the state of $5.2 billion a year. In Texas, more than 1 million residents get help, which reduces their average premiums from $328 to $89, or a total of nearly $3 billion a year.
This is money that residents of those states could use for many other purposes, while still enjoying the benefits of health insurance. When you see figures like that, you have to ask of Rubio, Cornyn and Cruz: Who in the world do you think you represent?