The Supreme Court’s King v. Burwell ruling comes as a relief to Obamacare’s defenders. But it should also come as a relief to those who want to see it repealed and replaced. I happen to believe that the plaintiffs in King v. Burwell were right on the merits. Justice Antonin Scalia’s dissent makes more sense to me than Chief Justice John Roberts’s majority opinion. As a political matter, however, King v. Burwell would have left Obamacare’s opponents in an extremely precarious position for the simple reason that conservatives in Congress had failed to coalesce around a coherent post-King strategy in the months preceding the decision.
Consider what might have happened had King v. Burwell turned out differently. To many of those cheering Thursday’s decision, the answer is straightforward: More than 6 million people in the 34 states served by the federal health insurance exchange would have lost the federal tax credits that helped them afford insurance, and the individual insurance markets in these states would have gone haywire as a direct result. This is the nightmare scenario that liberals feared most in the weeks and months leading up to the decision, and it would have galvanized the Democratic base had it come to pass.
But there were other possibilities. Many states that have been making use of the federal exchange had been thinking through possible shortcuts to establishing their own state exchanges. State legislators in New Hampshire, for example, floated the rather clever idea of enacting a state law that would simply declare the federal exchange to be New Hampshire’s state exchange for the purposes of collecting federal tax credits. Governors of other states might have issued executive orders to the same effect. Might some enterprising lawyers have sued state governments that went down this road? Sure. But I doubt they would’ve gotten very far.
Of course, not all states would have rushed to create state exchanges. There are 21 states that have yet to expand Medicaid under Obamacare, despite the fact that there are many constituencies, from low-income families to politically powerful medical providers, who would benefit from expansion. It could be that at least some conservative states would have resisted the political pressure to establish state exchanges on ideological grounds. But there is a big difference between choosing not to offer Medicaid to people who are currently uninsured and choosing to stand pat as hundreds of thousands of people in your state lose a benefit they currently enjoy. Back in February, Gov. Nikki Haley, R–South Carolina, by all accounts a staunch conservative, said that she’d at least consider backing a state exchange in the event that the Supreme Court ruled in favor of the plaintiffs in King v. Burwell. My guess is that Haley is not the only conservative Republican who would have moved in this direction. Thanks to the Supreme Court, she and other GOP governors won’t actually have to bite the bullet.
And of course it is also quite possible that Congress would have intervened to keep the Obamacare subsidies flowing. Why? As Ramesh Ponnuru has explained, congressional Republicans were divided into three camps on what to do if King v. Burwell went their way. First, there were those who would have refused to extend subsidies under any circumstances, even if it meant that millions of people would lose their health insurance, because extending subsidies would essentially mean aiding and abetting Obama. Second, there were those who feared the political fallout from a big decline in the insurance rolls, and who would have been willing to pass a quick fix to Obamacare to prevent it from happening. Third, there were those who sat uneasily between these two camps: They’d be willing to extend subsidies, but only if they could make other tweaks to Obamacare, like letting states opt out of some of Obamacare’s more onerous regulations. Republicans in this third camp devised a number of different proposals, and they worked furiously to win over Republicans in the first and second camps. Furiously, and fruitlessly. Peter Suderman, writing in Politico Magazine, notes that in March, Rep. Paul Ryan, R-Wisconsin, chairman of the House Ways and Means Committee and the closest thing House Republicans have to an intellectual ringleader, pledged that he would have a detailed post-King contingency plan ready to go by late June. Instead, he had little more than a vague outline. If Ryan couldn’t get Republicans to unite around a bill, it’s not clear who could have.
A conservative victory in King v. Burwell wouldn’t have dealt Obamacare a deathblow. Rather, it would have drawn attention to the extent to which Republicans remain divided over what should come after Obamacare. Should conservatives advance their own plan for achieving universal access to affordable health coverage, as some Republican reformers insist? Or should they focus first and foremost on shrinking the size of the federal government, even if it means reducing the number of Americans with affordable coverage? My own view is that there is no going back to the pre-Obamacare status quo and that if conservatives fail to address the anxieties of the uninsured, liberals will be more than happy to do so in their own government-expanding, command-and-control fashion. No Supreme Court decision will spare the right from actually having to duke it out over which approach is best. But the court did, on Thursday, give conservatives an opportunity to think hard about how badly we’ve botched the fight against Obamacare, and what we need to do next.