Obamacare in the ICU


The Hill reported this morning that Congressional Republicans are near a deal on a bill to keep some Obamacare subsidies in place should the Supreme Court rule against the administration King v. Burwell.  While this will no doubt be condemned by the usual suspects as proving the party’s insincerity in wanting to repeal the unpopular health care law, it makes sense for both policy and political reasons.

Polls show that while Obamacare itself is increasingly unpopular, and has been unpopular for the whole of its existence, they also show that people don’t particularly want an adverse decision in King v. Burwell.  But such a decision in Burwell would almost certainly spell the end of Obamacare, as the states with federal exchanges would lose their subsidies, collapsing the rickety system that Obamacare put in place.

How to resolve these apparently conflicting sentiments?

I think the answer is that people dislike uncertainty, chaos, and drama as much as they dislike Obamacare itself.  And while losing the subsidies would certainly collapse Obamacare, how it would collapse and how it would effect people on the way down is far from clear.  This isn’t a situation where the whole health care system simply reverts to the status quo ante, people’s rates come back down, and the exchanges go away.

Instead, some states would continue to get subsidies, others wouldn’t, and the executive would scramble around in vain trying to prop up the structure.  Nobody would know what the rules are, or what they would be tomorrow.  This would be true not only for consumers, but for doctors, hospitals, and insurers as well.  In short, for at least a while, the health insurance market would simply cease to function in any rational way.  The human cost of that chaos would be swift and severe.

What the Republicans are proposing to do is extend the subsidies temporarily until the system can be transitioned away from Obamacare.  This will prevent the immediate chaos, and will also possibly having the effect of reassuring that Court that it’s safe to rule against the administration.

Obama will fight this tooth and nail, simultaneously creating the drama while blaming the Republicans for it, in a repeat of the shutdown exercise from October 2013.  In this they will, as always, have the slavish cooperation of the press.  But the alternative – letting the administration assume the role of hero, even as people find themselves unable to obtain insurance or case – is far worse, and, as mentioned above, may be too much for the Court to swallow.

Even if the “temporary” period extends into the next administration, it would give a Republican president time to work with the Congress to pull together his own plan.

All this is only true, of course, if the actual intent is to repeal O-care and start moving toward more market-based solutions.  If it really is just an excuse to put off decisions and lose the momentum of the mid-term elections, then the condemnation will be deserved.

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