Currently pending before the U.S. Supreme Court (SCOTUS) is a case that could potentially blow up the Affordable Care Act (ACA) and cause more than 6 million people to lose their health insurance policies. A group of radical right wing libertarians have filed a challenge to the ACA based upon an alleged drafting error in the law. These radicals claim that subsidies for the purchase of health insurance are only legal in the 16 states that have set up their own exchanges. If the five Republican appointees on the SCOTUS – who enjoy the benefit of taxpayer financed health insurance – invalidate the subsidies being paid out to those who purchase insurance on the federally established exchanges in the other 34 states, the consequences for millions of newly insured people and the overall economy would be catastrophic in nature.
The radicals who have threatened to cripple the U.S. health care system by judicial fiat have advanced the novel theory that Congress deliberately agreed to withhold subsidies for the purchase of health insurance from people living in states that refused to set up a state-run health-insurance exchange and currently have a federally run insurance exchange. When Dave Heineman was Governor, he refused to set up an insurance exchange even though the stakeholders in Nebraska wanted a state based exchange As a result of Heineman’s lack of leadership, Nebraska currently has a federal insurance exchange.
The lawyers for the plaintiffs in the King case argued that Senator Ben Nelson insisted that tax subsidies be withheld in states that refused to set up their own exchanges. The former Nebraska Senator rejected those claims in a letter filed with the Supreme Court which stated: “I always believed that tax credits should be available in all 50 states regardless of who built the exchange, and the final law also reflects that belief as well.” In other words, one of the most important arguments made by the challengers to the ACA has been called incorrect by the very same senator relied upon by these litigants.
If the five most conservative members of the SCOTUS adopt a fraudulent reading of the legislative history of the ACA, the consequences for millions of Americans would be disastrous. Approximately 6.4 million people would lose their tax credits and could experience an average increase of 255% in their health insurance premiums. Most of those effected would have no choice but to drop their insurance coverage.
The damage from an adverse SCOTUS decision would not be limited to those losing their insurance policies – it would also cause serious damage to the health care industry and even the overall economy. According to experts at the non-partisan Kaiser Family Foundation: “A reasonable assumption is that (spending on) healthcare by people who lose their existing subsidies will drop by at least half. That would represent about $7.5 billion in spending on hospitalizations, doctor visits and prescriptions, depending on the baseline estimate.” Some experts have even said that a decision withholding subsidies from millions of Americans could cause a death spiral in the health insurance industry and much higher premiums for all Americans.
A “victory” by the plaintiffs in the King case would have an equally harsh impact in Nebraska. According to the Kaiser Foundation, approximately 57,000 Nebraskans would see their premiums soar and most likely be forced to drop their coverage. Consumers in Nebraska who would lose their subsidies would see their premiums increase about 265% according to this report. As Brad Ashford chief of staff Jeremy Nordquist said: “If the Supreme Court does strike the insurance subsidies, it’s a significant loss for Nebraska families.”
Governor Pete Ricketts could avoid harming thousands of Nebraskans by committing to setting up a state based insurance exchange in the event the five Republicans on the SCOTUS gut the ACA. Unfortunately, Mr. Ricketts is showing his usual lack of leadership and has said that that it would be “premature” to discuss how the state might respond if health insurance tax credits for working families are struck down by the court.
Nebraska State Democratic Party Chair Vince Powers responded to Ricketts in a strongly worded statement that said: “That is a dereliction of his duty. It is the Governor who is “premature” in supporting the end to tax credits, without any plan in place for families to keep their insurance. It is the job of the Governor to lead with solutions, not jeopardize families by making them more vulnerable with no alternative plan.”
On the federal level, the Republicans in Congress – like Ricketts – lack an alternative plan in the event the SCOTUS destroys the American health care system. This is because the Republicans in Congress are are deeply divided on how to respond to an adverse SCOTUS decision. Many Republicans are being pressured by the Koch brothers to oppose any ACA fix and just allow the U.S. health care system to collapse. Other Republicans like Ben Sassehave proposed plans that would continue the subsidies through the 2016 elections and then would completely repeal the ACA in January 2017.
The reality is that a bad ruling by 5 unelected justices could be rectified with a one sentence bill that mandated that all qualified consumers could qualify for a subsidy regardless of whether insurance was purchased from a state or federal exchange.
The five Republicans on SCOTUS would be utterly reckless and irresponsible if they threw out the ACA after it has provided coverage to 17 million formerly uninsured Americans and reduced medical inflation to it’s lowest level since the 1960s. The very legitimacy of the SCOTUS would be destroyed and it would go down as one of the most infamous judicial decisions in American history.
Washington Post columnist E.J. Dionne said it best: “Here’s a hypothetical for you: First, the Supreme Court issues a ruling that installs a conservative president. Then, he appoints two conservative Supreme Court justices who then join with three of their colleagues to make mincemeat of the greatest achievement of a progressive president elected by a clear majority. If such a thing happened in any other country, would we still call it a democratic republic?”