Remember the Halbig case? There’s a part of the ObamaCare statute that says you’re eligible for money from Uncle Sam to pay the premiums on your new health insurance plan provided that you bought your plan on “an exchange established by the State.” The left says that phrase includes the federal exchange; the right says nope, it means only the exchanges established by individual states. The whole point of the subsidies, in theory, was to create a financial incentive for state governments to build their own exchanges so that the feds wouldn’t have to build one. If the Supreme Court, which is set to rule within the next few months, agrees with the right’s interpretation of the text, millions of people who bought their plans on Healthcare.gov, the feds’ exchange, will see their subsidies disappear. They’ll either have to pay their expensive premiums entirely out of their own pockets or they’ll have to drop their plans, which could cause chaos to ObamaCare’s risk pools and even potentially trigger a “death spiral.” There’s lots of money and lots of potential voter anger at stake. But it’s a golden opportunity for ObamaCare opponents: Our best chance to kill the law at this point would be to have SCOTUS take the subsidies away and then have Republicans in Congress and at the state level steadfastly refuse to restore them. Without those subsidies the law is probably unsustainable.
But there’s an election to be won, my friends. Which means, whatever happens in court, the subsidies are coming back. For a little while, at least.
The legislation, offered by Sen. Ron Johnson (R-WI), one of the most politically vulnerable Senate incumbents in 2016, would maintain the federal HealthCare.gov subsidies at stake in King v. Burwell through the end of August 2017.
The bill was unveiled this week with 29 other cosponsors, including Senate Majority Leader Mitch McConnell (R-KY) and his four top deputies, Sen. John Cornyn (R-TX), John Thune (R-SD), John Barrasso (R-WY) and Roy Blunt (R-MO). Another cosponsor is Sen. Roger Wicker (R-MS), the chairman of the conference’s electoral arm…
Also notable is the Republicans who are not among the bill’s cosponsors, including three presidential candidates — Sen. Ted Cruz (TX), Sen. Rand Paul (KY) and Sen. Marco Rubio (FL) — as well as other vulnerable senators facing reelection including Sen. Mark Kirk (IL), Kelly Ayotte (NH) and Pat Toomey (PA).
Heavy majorities, including a majority of Republicans, want the subsidies restored if the White House loses in Halbig, an ominous sign for the congressional GOP. In theory, voter anger could be so intense that both chambers of Congress will end up back under Democratic control, ensuring that the subsidies will be restored anyway. Now, show of hands: Who thinks the GOP will even considering refusing to renew subsidies in August 2017, when Johnson’s bill would be set to expire? They’ll be 15 months from a key midterm election at that point, one they may be counting on to return control of the Senate to Republicans after Democrats retake a narrow majority in 2016. This is the eternal problem with top GOPers trying to postpone key fights for electoral reasons — there’s always another election to win right around the corner. In fairness to Johnson, his bill does include some other things that would make conservatives happy, like repealing the individual mandate (which could also damage ObamaCare, although not nearly as badly as losing the subsidies would), but that seems more like leverage for the inevitable negotiations with Senate Democrats than something Republicans would insist on. It may be that Democrats will demand permanent reinstatement of the subsidies, the GOP will counter with “no way, and forget about the mandate too,” and then the two sides will compromise by leaving the mandate alone and agreeing to “temporarily” reinstate subsidies every few years, a la “doc fix.” Which, actually, might not be the worst possible outcome: If you want to force the GOP to push its own version of repeal-and-replace health-care reform, the prospect of them having to take a tough vote periodically on giving billions to people who bought into O-Care is one way to concentrate their minds on the problem.
In the meantime, though, you’re watching a game of GOP hot potato play out in real time over Halbig. The congressional strategy until now has been to do nothing, hope that SCOTUS deep-sixes the subsidies, and then leave it to Republican governors and state legislatures to make the hard decision about whether to build their own state exchanges so that their residents can be eligible for subsidies again. No way, said Scott Walker last week: Congress created this mess, it should be Congress that’s forced to clean it up by passing something to deal with the subsidies issue. (Another governor who’s eyeing a 2016 run, Bobby Jindal, notably called last month for not reinstating the subsidies if they’re struck down.) So now here’s the Senate GOP leadership trying to help Walker out, led by his fellow Wisconsinite Ron Johnson — a guy who’s not only running for reelection in a blue state but currently trails Russ Feingold in a hypothetical match-up by 16 points. (Coincidentally, Johnson also voted today to confirm Loretta Lynch.) Why congressional Republicans would suddenly feel impelled to move on this and solve this problem for their state colleagues, I’m not sure; presumably McConnell et al. think they’ll be blamed next year for doing nothing even if, as expected, many red states respond by setting up their own exchanges. Or maybe they fear that red-state governors will stand firm and refuse to build the exchanges, putting the ball back in Congress’s court. In other words, McConnell and the rest might be making this move because they know state-level Republicans have more backbone than they do.
Via TPM, listen below to a recent exchange on a radio show in which Johnson was asked about restoring the subsidies. If we don’t pass my bill, he says, one of two things will happen. Either Obama will float a one-line bill in Congress asking for permanent restoration of the subsidies or he’ll offer to help red states build their own exchanges quickly by essentially allowing them to take over the state risk pools already built by Healthcare.gov. Is it really that easy, though? Red-state pols might not be willing to make a deal like that with O, preferring to let Congress take the heat for fixing this instead. And not even Senate Republicans would feel comfortable restoring subsidies permanently during an election year. They’ll end up countering with a temporary fix, which is what Johnson’s bill does, in which case why not speed up the process by simply offering Johnson’s bill now? The big X factor here is whether Senate Democrats will agree to temporarily restore subsidies or whether they’ll play hardball and threaten to filibuster any bill that doesn’t make them permanent. That would be risky — they, not the GOP, would be the party guilty of preventing subsidies from flowing again after a SCOTUS decision — but they usually come out smelling like a rose in the media when they play hardball with Republicans. “We’ll accept nothing less than permanent reinstatement of subsidies for all hard-working Americans!” Schumer will say. What will McConnell say to that?