So the Supreme Court has upheld the subsidies and taxes under Obamacare in states that did not establish exchanges, despite the text of the law requiring that those subsidies and taxes apply to states that established exchanges. This is not very surprising. We have not been publishing or writing much about the King v. Burwell because I was confident – I thought it was a 1 in 5 shot, and I believe Michael Cannon thought the same – that SCOTUS would uphold the law no matter the facts of the case. In the short run conservatives may feel depressed about today’s ruling. But in the long run I actually think this is probably a huge win for the anti-establishment faction of the party.
Why? Because this SCOTUScare ruling presents an accurate reflection of the reality in Washington: that American politics no longer has real checks and balances. The rules no longer apply. Words mean whatever we say they mean at the time that we say them, neither more nor less. Welcome to the Cartman presidency, where the executive does whatever he wants, up to and including making IRS bureaucrats decide a multi-billion dollar issue. Think the text means exactly what it says? Judicial fiat says lol, jk.
In the context of a nation governed by men and not laws, arguments from the establishment about process, restraint, and the normal give and take of what used to be the American political system for most of the Twentieth Century are going to become weaker and weaker. For the faction that demands dramatic change, the gradualist approach favored by Republican leaders who yearn for the status quo politics of the before time – before the bailouts, before Obama, before the Tea Party – is revealed as a myth.
King v. Burwell targeted subsidies going to a relatively small portion of Obamacare’s beneficiaries (6.5 million subsidized people, many of whom lost coverage they would’ve preferred to keep). The Medicaid portion is really the one aspect of Obamacare that’s working in terms of signing people up, and a King ruling in the other direction would’ve done nothing about that. Those subsidies aren’t working sufficiently – they are not insulating the people on Obamacare from increased costs, including deductibles copays etc. – and with the latest round of cost increases people are going to have more reason to feel like Obamacare isn’t working for them. Had it gone the other way, King would’ve created chaos in just one aspect of Obamacare, and one that is not working well even now.
By losing at the Court, conservatives missed out on a chance for another squishout and for that reason should be breathing a sigh of relief. The hard truth was that the Republican Party was absolutely going to cave on the subsidy question anyway, and do so rapidly, and probably get a bag of basketballs and the medical device tax in exchange. That would’ve both depressed the base and put politicians in an untenable position. Given the certainty of Republicans caving on the subsidies, Obamacare would have emerged with Republican fingerprints all over the idea that we need to be taxing people in order to continue subsidizing able bodied working age adults (as it is, only a handful of Republicans have endorsed that idea). Now Republicans get the added benefit of railing against a law that remains unpopular and that drives health insurance costs ever higher across the country without having to put their legislation where their mouths are.
Finally, this decision is a huge opportunity for Republicans to finally take the health care issue away from Democrats in a serious way. It is not an iron law of politics at all that health care reform remain a Democratic issue any more than education policy or welfare policy. President Obama and the Democrats now own every bad thing about the health care status quo. Much of the coverage that surrounded King v. Burwell was focused on the idea that Republicans were going to own some aspect of Obamacare at the end of it – and I trust that they would have. Every new bad thing under Obamacare is attributable to increased government involvement, which is Democrats’ only remedy going forward as well. This is an opportunity Republicans can capitalize on in a meaningful way in 2016, and it will require candidates willing to do the hard work of preparing to make a comprehensive argument for health care change and defend their plans in the public square.
Thus, I think the ruling today probably increases the likelihood of repealing Obamacare in 2017 by a not insignificant margin.