Nel's New Day

March 5, 2015

GOP Hopes for Death Spiral

Health care was the focus of the Supreme Court yesterday when nine justices heard King v. Burwell. If the court rules that the subsidies from Affordable Care Act (ACA) can be provided only by state exchanges, millions of people, including five million children, will lose their health insurance because they will no longer have subsidies. If the 7.5 million people from 34 states on the federal exchange lose tax subsidies—and thus their insurance—insurance will raise rates for other policyholders who may then not be able to afford it, etc., a sequence known as the ACA death spiral. The change may cause almost 10,000 annual deaths in the U.S. and destabilize the insurance market in many states.


Charity may be the only solution if the Supreme Court rules against the federal exchange. For example, Richard Mack, a former Arizona county sheriff and Tea Partier opposing the ACA, is now begging the public for money to pay their health costs through a GoFundMe campaign. A board member of the right-wing fringe Oath Keepers, Mack gained fame by hiding behind women on the “front lines of freedom” at the Cliven Bundy Ranch last year.

Four Virginia plaintiffs are challenging the federal exchange on the basis of four words read out of context that were left in the law after a revision. The standing of these plaintiffs comes from the question of whether these four people suffer “grievous harm by being forced to either buy health coverage or pay a penalty”:

  • David King, 64, a limo driver and veteran who has both low income and a VA card making him eligible for free health care. People can opt out of the insurance mandate if they would have to pay more than 8 percent of their income for health care.
  • Douglas Hurst, 53, a Virginia Beach resident and veteran who would be eligible for large savings and probably veterans’ health care. According to bankruptcy filings, Hurst paid more than $600 a month for his insurance in 2010; with the ACA, he would pay $62 per month. His wife does his speaking for him, but she’s too old to be a plaintiff because she’s on Medicare—a government health care program.
  • Rose Luck, a woman who listed her address as a motel where she hasn’t lived since late 2013. She would also likely meet the low-income opt-out advantage. She thinks President Obama is the “anti-christ” who is only in office because he “got his Muslim people to vote for him.”
  • Brenda Levy, 64, a substitute teacher who couldn’t remember how she’d been recruited for the case and seemed unaware of the possible consequences. She said she doesn’t want anyone thrown off her health insurance. Because her employer listed her annual income as $10,000, she too would not have the mandate. (Her signed affidavit said that her 2014 income would be $45,000.) By the time of the decision, she will also be old enough for Medicare.

King and Hurst have declared that they were “not eligible for health insurance from the government or any employer.” King said he didn’t remember his lawyers’ asking him about his access to veterans care and said his only purpose is to bring down the ACA. One of the lawyers, Yaakov Roth, said the two men weren’t eligible under the legal meaning of the word because they hadn’t enrolled.

Spokeswoman Annie Dwyer for Competitive Enterprise Institute, the libertarian think tank that brought the suit and is bankrolling it, said, “The lawyers are not concerned about standing issues.” They might not be concerned, but Justice Ruth Bader Ginsburg is. She pointed out the legitimacy of the case depends on the plaintiffs having “a concrete stake in the question.” The plaintiff’s lawyer said that the lower courts had not raised any standing issue, but Ginsburg said that “the Court has an obligation to look into it on its own.”

The opposition to the ACA will also have trouble proving that a decision against the law would have minor repercussions. Lawyers have claimed that states will provide for those denied subsidies because the law was intentionally designed to deny subsidies if states didn’t create their own exchanges. They claimed that states refused to establish subsidies only because the IRS didn’t clarify “that subsidies were limited to state Exchanges.” It was actually the Supreme Court decision three years ago that allowed states to opt out. Even more chaos comes from some state laws preventing state exchanges.

During yesterday’s arguments, Justice Anthony Kennedy recognized the seriousness of the situation when he warned that a decision siding with the challengers could lead to the collapse of insurance markets by creating an ultimatum for the states: “Either create your own exchange, or we’ll send your 17 insurance markets into a death spiral.”  He warned Michael Carvin, attorney for the plaintiffs, that “there’s a serious constitutional problem if we adopt your argument [against the ACA].” Protesters gathered in front of the Supreme Court building to show the horrifying impact of an adverse ruling by the court.

ACA Protesters

Chief obstructionist to the ACA, Sen. Chuck Grassley (R-IA) described a lawsuit seeing to gut the Affordable Care Act in the Supreme Court as “ridiculous.” He added, “We obviously meant that the subsidies would go to the federal exchange and not just the state exchange.” Steven Brill, veteran journalist and author of a recent book on the Affordable Care Act, said that he asked “all the Republican staffers” who worked on the bill about this suit, and “they laughed at it.” A short list of ACA opponents who previously indicated that the law provides tax credits regardless of who operates a particular state’s exchange includes Republican Govs. Dave Heineman (R-NE), Nikki Haley (R-SC), Bob McDonnell (R-VA) and Scott Walker (R-WI); Sen. Orrin Hatch (R-UT); former vice presidential candidate Rep. Paul Ryan (R-WI); and the conservative Heritage Foundation.

The Republicans have no idea what they will do if they get their wish. In a Washington Post op-ed, three GOP senators–Lamar Alexander (TN), John Barrasso (WY), and Orrin Hatch (UT)–claimed that they would help everyone who lost their federal health insurance subsidies. They promised they would “provide financial assistance to help Americans keep the coverage they picked for a transitional period” and give states more flexibility to create their own health insurance marketplaces. Yet they had no answers to how much assistance, how long it would last, how they would pay for it, and—most important—how they would overcome GOP naysayers. They may have a plan, but they’re not sharing it.

These three senators aren’t the only ones who are panicking about the possibility of achieving their goal. Some GOP members of Congress are discussing a bill to take temporary care of the disaster, but that will most likely fail without Democratic help just as DHS funding demanded a bipartisan approach. Nine GOP states are talking about state exchanges. The GOP had promised “death panels” in the ACA, but now they are faced with voters knowing about the “death panels” of eliminating the ACA—not a good lead-in to the 2016 election.

Florida Republicans spent almost $1 million on its own alternative marketplace. It was a failure—perhaps because it didn’t include cover costs of hospital stays and limit out-of-pocket expenses for surgeries. Instead the Florida plan provided discount coupons for prescriptions and eyeglasses. Only 30 of 750,000 eligible people signed up within the first six months with the number swelling to 49 after a year. In comparison, 1.6 million in Florida—the highest number in any state—signed up for ACA during the 2015 open enrollment despite roadblocks set up by the Florida GOP.

Although not all supportive of President Obama, a coalition of state officials, insurance companies, hospitals, physicians, and nurses have filed briefs warning of the consequences if the subsidies are withdrawn. Sign-up for the current year shows the overwhelming impact of a decision against the ACA: about 11.2 million people went to the exchanges for insurance with 87 percent of them receiving subsidies.

As Ian Millhiser pointed out, a big predictor of a judge’s vote can be the political party of the president who appoints each one. Five of the nine justices came from Republican presidents—two from each of the Bushes and one from Reagan. The four justices appointed by Democrats will most likely follow Justice Elena Kagan’s statement from a recent ruling: “We do not ‘construe the meaning of statutory terms in a vacuum.’“  She repeated the sentiment during yesterday’s arguments: “We look at the whole text. We don’t look at four or five words.”

Three others—Samuel Alito, Antonin Scalia, and Clarence Thomas—are even more predictably on the opposite side. Scalia showed his opposition to the ACA in yesterday’s arguments when he assured Solicitor General Donald Verrilli Jr. that Congress would take care of any problems. “This Congress?” Verrilli replied, bringing laughter from the gallery.

Anthony Kennedy, a Reagan appointee, was in favor of eliminating the law three years ago, but he is a federalist. King argues on the side of states rights. In addition, Kennedy is strong supporter of children’s welfare. John Roberts, the Chief Justice, voted almost entirely in favor of the ACA in the last go-round three years ago possibly because he was worried about the image of the court. He might not change his position in King to persuade people that the highest court is not a wing of the GOP.

Millions and millions of people may lose their health insurance thanks to the Koch brothers, who finance the Competitive Enterprise Institute, the organization that planned this debacle from the beginning. Yesterday’s Supreme Court arguments started almost five years ago at a conservative gathering when the wealthy decided that the poor didn’t deserve health care. Nine justices will now make a final decision.


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