Yesterday, the Supreme Court heard arguments about the latest legal challenge to Obamacare, and depending on how the court ultimately rules millions of people could end up losing their health insurance.
Then again, millions of other people will be unaffected. It all depends on where you live. If you happen to reside in a state that built its own health care marketplace, you’re safe. However, if your state handed that responsibility over to the federal government, you could lose the subsidies that make Obamacare work — putting your whole health care system in jeopardy.
That’s one of the peculiarities of this case. While the stakes are quite high, they hinge on a very narrow, and fairly technical decision made by individual states. Massachusetts itself faced this same decision just last year, and had we chosen to give up on our failing marketplace, we too would be risking a massive disruption to our health care system.
What’s this lawsuit about?
Two years ago, the Supreme Court heard arguments about whether Obamacare was constitutional, and they found that it was.
This time, the challenge is narrower. It has to do with the health care marketplaces — also called exchanges — that are so central to the law. Each state had a choice about whether to build its own health care exchange or whether to rely on a version developed by the federal government. Thirteen states went the home-brew route, 34 states punted (and three are in a kind of legal limbo).
Part of what makes the exchanges work are the subsidies provided by the federal government. Without those subsidies, it would be virtually impossible for lower-income people to buy health insurance — and the law requires that they buy it.
Trouble is, a section of the law says those subsidies would only be available “through an Exchange established by the State.” The question before the court is whether that phrase implies that subsidies should not be given to states with a federally developed exchange.
Prior to the lawsuit virtually no one interpreted Obamacare in this way. Not the staffers who worked on it, not the journalists who reported on it, not the modelers who tried to estimate its effects, and not even the states who were deciding whether to setup their own exchanges. They all assumed that the subsidies would be universally available.
What’s the story in Massachusetts?
Our first effort to build a health care exchange was a horrible failure, expensive and unusable. Early in 2014, the state basically decided to start from scratch.
But by that point there was so much skepticism that we decided to follow a “dual track,” making one last push for a state-run exchange while at the same time preparing for the possibility that we would need a federally run version.
Only in August 2014, when our second effort passed a stress test, did we finally commit to the state-run system.
What happened during arguments yesterday?
Several of the justices expressed concerns about the consequences of restricting subsidies. Would it break the health care system in 34 states? Could Congress be counted on to fix the situation in a reasonable and timely manner? And, in a much-discussed comment from Justice Kennedy, if subsidies are limited to states with their own exchanges, does that amount to a kind of coercion, essentially forcing states to build exchanges?
Predicting the outcome of a case based on what the justices say during oral arguments is notoriously difficult. The last time Obamacare came before the Supreme Court, many folks got it wrong.
In this case, it’s widely assumed that the four liberal justices — Kagan, Sotomayor, Ginsburg, and Breyer — will vote to keep the subsidies in place. The three most conservative justices — Scalia, Alito, and Thomas — are expected to overturn them, however, meaning that the final outcome may depend on the leanings of Kennedy and Roberts.
What happens next?
Radio silence, at least for a little while. The court isn’t expected to rule until the end of the term, which is in June. And since Supreme Court leaks are extremely rare, very little information is likely to escape.
Come summer, however, the justices will announce their ruling. And as they acknowledged yesterday, the consequences could upend health care systems across much of the United States.
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