Is Washington Ready For The Death Of Obamacare?

The possibility that the U.S. Supreme Court will soon eliminate federal subsidies for people buying health insurance through the Affordable Care Act is the biggest story in politics and economics that no one wants to talk about.

But the stakes in King v. Burwell, which the court will hear on March 4, could scarcely be higher: If the plaintiffs prevail, millions of people in 34 states who bought insurance on federal exchanges would suddenly lose the subsidies that make it affordable.

Consequently, most would lose their coverage. A Rand study pegged the number at 9.6 million people, with premiums soaring 47 percent for those still able to afford them. “Everyone agrees this would be a cataclysmic hit to the insurance market,” Michael Kolber, a health-care attorney at Manatt, Phelps & Phillips, said at a Feb. 13 Bloomberg Intelligence panel on King v. Burwell.

The immediate effect of a ruling against the ACA would be to hurl the political system, and no small part of the economy, into chaos. Yet there’s little sign that Washington is preparing for that scenario.

Democrats won’t talk about what they would do because they don’t want the court to believe they could contain the fallout.

Republicans don’t want to talk because they’re loath to admit that, even after voting 67 times to repeal or defund the ACA, they have no plan to help the millions who would be affected. (But they’d sure love the court to kill the law anyway.)

Practically alone among Republicans, [Stuart Butler of the Brookings Institution in Washington] is sounding an alarm about what a decision in favor of the King plaintiffs would carry with it. While Democrats would be dismayed if the court guts Obama’s signature initiative, Butler’s worry is grounded in an understanding that voters with skyrocketing premiums may not blame Obama, as Republicans assume. They’ll expect the party hellbent on destroying the law to have a solution—and react badly if none is forthcoming.

Because 16 states operate their own exchanges and therefore won’t be affected by the court’s ruling, Butler believes the ACA will stagger on and eventually recover, since voters won’t abide a system wherein some states have affordable, federally subsidized health-care coverage and others do not.

Absent an alternative, he says, the ACA will rise again like a horror-movie killer. “People who believe the ACA instantly goes away are deluding themselves,” he says.

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