King v. Burwell: Alternative Endings

Next month, the Supreme Court of the United States, SCOTUS, will announce its decision, clearly already made, in the case of King v. Burwell. What happens after we know which way they go, for or against the Affordable Care Act (ACA)? Either decision will affect us greatly long-term. Deciding for King will have more immediate consequences. What are these effects?

Stripped of polemics and word parsing, the case is relatively straightforward, especially considering how convoluted SCOTUS cases usually are. The ACA says that subsidies for health insurance can flow only through exchanges “established by a State.” King et al claim that subsidies handed out by a federally created exchange, viz., healthcare.gov, are illegal by the law. The administration calls this a “drafting error,” and that Congress always intended people to get subsidies, however they were distributed.

Interestingly, the administration apparently recognized that the law actually prevented healthcare.gov from offering subsidies. That is why the IRS issued a ruling saying it could do what the law said it could not.

The following are the consequences of whichever decision SCOTUS makes.

SCOTUS Holds For Burwell

Chief Justice John Roberts is a great pretzel-maker. He turned both logic and the law in knots in order to preserve the ACA in 2012 when he cast the tie-breaking vote in National Federation of Independent Business v. Sebelius. If he holds for Burwell in the present case, he will again make a pretzel.

If the ACA said that subsidies handed out by the federal government were legal, why did the IRS have to issue an advisory to that effect? Clearly, they knew the law did not allow it, so they just reversed the law. By holding for Burwell, SCOTUS is saying it is okay for a bureaucracy -- the IRS -- to change what Congress does. In other words, there is no rule of law, only the rule of those in power.

A holding for Burwell will have little immediate impact on you and me. It will leave the ACA as it currently is, radically changed from 2010 but still offering subsidies. We know that the long-term harmful effects of ACA include increased spending, not decreased; more expensive insurance, not less; and worst of all, less available health care, not more.

A decision for Burwell will have an effect on the public’s perception of SCOTUS. For years, the American people have been questioning the reasonableness and, for want of a better term, the “rightness” of Court decisions. A decision for Burwell will only further damage the Court’s credibility.

Court decisions seem to be more parsing of words than deciding for what it right over what is clearly wrong. The Court increasing is making public policy decisions based on their personal political biases rather than saying what is in concert with the Constitution and what is not. Aren’t those their primary jobs -- right v. wrong and Constitutionality?

SCOTUS Holds For King

A decision for King et al will have immediate and significant effects on you and me at the state level, on our employers, and on millions of individual citizens.

1) Subsidies currently provided through healthcare.gov would cease. It is doubtful that the IRS will demand return of the money that has already been distributed. Approximately six million Americans who signed up for subsidized insurance will find their costs will skyrocket. The insurance premium charge will not change, but now the individual will have to pay the true premium cost, not the subsidized one. That could easily triple their out-of-pocket or more.

2) Striking down individual subsidies will also affect the business community. The reason is another of the many ironies created by the deeply flawed ACA.

Under ObamaCare, if employers do not offer support for ACA-compliant insurance plans to their employees, there is a financial penalty to the employer. Here comes the irony. Penalties for employers are only triggered when the employee receives a subsidy. If there are no subsidies, then there are no employer penalties.

3) Under ObamaCare, individuals who chose not to sign up for ACA-compliant insurance are also penalized, but that changes with a decision for King.

The ACA, “nano-managing” everything as it does, says that there is no penalty if the cheapest available insurance cost more than eight percent of a person’s income. Without subsidies, the cost of insurance goes way up, in most cases to more than “eight percent of income.” For all these people, elimination of federal subsidies also eliminates the personal penalty tax.

The elimination of subsidies will have major effects on many Americans, as noted above. Americans do not like being coerced, which is why the resistance to ACA continues unabated. However, we also do not like having something given to us like subsidies, and then have it taken away.

A decision for King will generate a great outcry for Washington to make it affordable for me, like it was with ACA. I trust the additional irony is not lost on you, if we demand that a Republican-led Congress restore the Democrat-imposed ACA.

Both the White House and the IRS had said they have no plans in place to deal with the consequences of a decision for King et al. Republicans in the House have had numerous discussions, but as yet, no plan is forthcoming.

Whichever way SCOTUS decides, one thing is certain: we are all experiencing the Chinese curse, “May you live in interesting times.”

Dr. Deane Waldman MD MBA is author of award-winning “The Cancer In Healthcare;” Professor Emeritus of Pediatrics, Pathology and Decision Science; and Adjunct Scholar (Healthcare) for the Rio Grande Foundation, a public policy think tank. Dr. Deane also sits on the Board of Directors of the New Mexico Health Insurance Exchange, as Consumer Advocate. Opinions expressed here are solely his and do not necessarily reflect the opinions of the Board.

Next month, the Supreme Court of the United States, SCOTUS, will announce its decision, clearly already made, in the case of King v. Burwell. What happens after we know which way they go, for or against the Affordable Care Act (ACA)? Either decision will affect us greatly long-term. Deciding for King will have more immediate consequences. What are these effects?

Stripped of polemics and word parsing, the case is relatively straightforward, especially considering how convoluted SCOTUS cases usually are. The ACA says that subsidies for health insurance can flow only through exchanges “established by a State.” King et al claim that subsidies handed out by a federally created exchange, viz., healthcare.gov, are illegal by the law. The administration calls this a “drafting error,” and that Congress always intended people to get subsidies, however they were distributed.

Interestingly, the administration apparently recognized that the law actually prevented healthcare.gov from offering subsidies. That is why the IRS issued a ruling saying it could do what the law said it could not.

The following are the consequences of whichever decision SCOTUS makes.

SCOTUS Holds For Burwell

Chief Justice John Roberts is a great pretzel-maker. He turned both logic and the law in knots in order to preserve the ACA in 2012 when he cast the tie-breaking vote in National Federation of Independent Business v. Sebelius. If he holds for Burwell in the present case, he will again make a pretzel.

If the ACA said that subsidies handed out by the federal government were legal, why did the IRS have to issue an advisory to that effect? Clearly, they knew the law did not allow it, so they just reversed the law. By holding for Burwell, SCOTUS is saying it is okay for a bureaucracy -- the IRS -- to change what Congress does. In other words, there is no rule of law, only the rule of those in power.

A holding for Burwell will have little immediate impact on you and me. It will leave the ACA as it currently is, radically changed from 2010 but still offering subsidies. We know that the long-term harmful effects of ACA include increased spending, not decreased; more expensive insurance, not less; and worst of all, less available health care, not more.

A decision for Burwell will have an effect on the public’s perception of SCOTUS. For years, the American people have been questioning the reasonableness and, for want of a better term, the “rightness” of Court decisions. A decision for Burwell will only further damage the Court’s credibility.

Court decisions seem to be more parsing of words than deciding for what it right over what is clearly wrong. The Court increasing is making public policy decisions based on their personal political biases rather than saying what is in concert with the Constitution and what is not. Aren’t those their primary jobs -- right v. wrong and Constitutionality?

SCOTUS Holds For King

A decision for King et al will have immediate and significant effects on you and me at the state level, on our employers, and on millions of individual citizens.

1) Subsidies currently provided through healthcare.gov would cease. It is doubtful that the IRS will demand return of the money that has already been distributed. Approximately six million Americans who signed up for subsidized insurance will find their costs will skyrocket. The insurance premium charge will not change, but now the individual will have to pay the true premium cost, not the subsidized one. That could easily triple their out-of-pocket or more.

2) Striking down individual subsidies will also affect the business community. The reason is another of the many ironies created by the deeply flawed ACA.

Under ObamaCare, if employers do not offer support for ACA-compliant insurance plans to their employees, there is a financial penalty to the employer. Here comes the irony. Penalties for employers are only triggered when the employee receives a subsidy. If there are no subsidies, then there are no employer penalties.

3) Under ObamaCare, individuals who chose not to sign up for ACA-compliant insurance are also penalized, but that changes with a decision for King.

The ACA, “nano-managing” everything as it does, says that there is no penalty if the cheapest available insurance cost more than eight percent of a person’s income. Without subsidies, the cost of insurance goes way up, in most cases to more than “eight percent of income.” For all these people, elimination of federal subsidies also eliminates the personal penalty tax.

The elimination of subsidies will have major effects on many Americans, as noted above. Americans do not like being coerced, which is why the resistance to ACA continues unabated. However, we also do not like having something given to us like subsidies, and then have it taken away.

A decision for King will generate a great outcry for Washington to make it affordable for me, like it was with ACA. I trust the additional irony is not lost on you, if we demand that a Republican-led Congress restore the Democrat-imposed ACA.

Both the White House and the IRS had said they have no plans in place to deal with the consequences of a decision for King et al. Republicans in the House have had numerous discussions, but as yet, no plan is forthcoming.

Whichever way SCOTUS decides, one thing is certain: we are all experiencing the Chinese curse, “May you live in interesting times.”

Dr. Deane Waldman MD MBA is author of award-winning “The Cancer In Healthcare;” Professor Emeritus of Pediatrics, Pathology and Decision Science; and Adjunct Scholar (Healthcare) for the Rio Grande Foundation, a public policy think tank. Dr. Deane also sits on the Board of Directors of the New Mexico Health Insurance Exchange, as Consumer Advocate. Opinions expressed here are solely his and do not necessarily reflect the opinions of the Board.